Dapio, the U.K.-based cashless payment solutions provider for businesses, today announced that it has raised $3.4 million to fuel the launch of itsTap to Pay solution forAndroid users in the U.K.

Techstars co-led the growth round. Daniel Gould is a partner at Asymmetry.

Dapio allows businesses to accept cashless payments in-store as its technology converts the back of any Android phone into a direct card reading terminal, not to be confused with the Egyptian payments processor of the same name.

Point-of-sale systems can be expensive and clunky, making it difficult to invest in hardware for micro-businesses and solo enterprises. They can take payments from customers.

75% of businesses in the U.K. are underserved by traditional payments providers because these systems are hard to purchase.

I entered the U.K. a few years ago and I always struggled with getting financial services, like insurance, opening bank accounts, starting accepting payments, according to co-founder and CEO Kosta Du.

I know how hard it is to go to a bank and get the exact procedure for a big enterprise. When my wife had to send wire transfers to pay clients because they were not eligible for big machines, it was a problem as well. I thought there should be a more elegant solution for solopreneurs and micro-businesses to make payments.

Dapio was started by Du and Grigory Gurbanov in 2019. In the years that have followed, the company has engaged with various financial institutions to obtain licenses to operate a mobile app that replaces card machines.

The launch of Dapio is a sign of where the U.K. payments scene is headed.

Apple is planning to launch Tap to Pay in the U.S., but Dapio is only targeting the Android market.

The company plans to launch a mobile app this spring that will allow any business to accept payments with the tap of a card or phone.

If you are starting a business or an entrepreneurial endeavor, you might need to open a bank account and get a machine that costs $300. We invented a mobile app that sits on your phone.

When you need to charge a payment, you just open the app and the customer's card is behind the phone.

Dapio is the image.

How does Dapio plan to stand out from the crowd when there are so many different payment options?

The key difference between us and other players is that we want to go through embedded finance. We don't only want to reach out to businesses directly, instead, we want to integrate our technology into existing applications of banks, POS vendors, and other businesses who will integrate our tech to all of their business clients.

Up to 20 merchants are testing out Dapio's product. By the time Dapio goes live, CEO Du said it would have onboarded more than 3,500 merchants onto the platform.

As ZmBIZI and Payment Plus power the technology behind Dapio's expansion across the U.S., U.K. and Europe, co-lead investor Flutterwave will be essential for when it wants to expand into Africa and the Middle East.

It wasn't expected that a Flutterwave investment outside the shores of Africa would make a public investment in a Ivorian fintech. The CEO of the company, Agboola, said in a February interview that the company is particular about penetrating advanced markets and that it has done so with Dapio.

We want to change our focus from Africa to emerging markets and eventually the U.S., the U.K., Europe. Our goal is to make sure that our infrastructure powers those corridors.

The key point for us is that we are enabling payment acceptance for micro and small businesses, that is what drives the recent economic trends. We were really wanted to be a part of their bigger vision.