Starling and Adyen target SME pain points together

Starling and Adyen target SME pain points together

Under the agreement, Starling’s business customers will soon be able to accept contactless card and mobile wallet payments directly through eligible smartphones, removing the need for separate payment terminals or third-party acquiring applications.

The service will operate entirely within the Starling banking app, creating a unified environment for payment acceptance, settlement, invoicing and refunds.

The move reflects a broader shift in the payments industry, where merchant acquiring services are increasingly being embedded directly into digital banking ecosystems. For SMEs, this convergence promises lower operational complexity, faster onboarding and improved cash flow visibility.

Smartphones Become Payment Acceptance Devices

SoftPOS, or tap to pay technology, has gained considerable traction globally over the past two years as merchants seek lower-cost alternatives to traditional card terminals.

By transforming a smartphone into a payment acceptance device through near-field communication (NFC) technology, banks and fintechs are able to dramatically reduce barriers to entry for micro merchants and small businesses.

For Starling customers, the attraction is simplicity. Businesses will be able to activate payment acceptance within minutes, while settlement funds are expected to arrive the following business day.

Importantly, the merchant remains inside the Starling ecosystem throughout the process rather than being redirected to external acquiring platforms.

According to Adyen UK managing director Nicole Olbe, the collaboration is designed to bridge the gap between payment processing and day-to-day financial management for SMEs. The integration combines Adyen’s global acquiring infrastructure with Starling’s banking capabilities, allowing businesses to manage both banking and commerce activities through a single interface.

Embedded Finance Continues to Reshape SME Banking

The announcement also underlines how embedded finance is reshaping the competitive dynamics of SME banking in the UK. Traditional distinctions between banks, merchant acquirers and payment service providers are becoming increasingly blurred as institutions seek to offer end-to-end financial ecosystems.

Later this year, Starling plans to introduce payment links within its in-app invoicing service, enabling SMEs to collect payments through cards or digital wallets directly from invoices.

This additional functionality could prove particularly valuable for sole traders, mobile merchants and service-based businesses seeking faster and more flexible ways to collect payments remotely.

Security remains central to the proposition. Transactions are processed securely through NFC technology, while card credentials and transaction data are never stored on the merchant’s smartphone or servers. PIN-on-glass functionality and accessibility features are also built into the experience.

For the wider payments sector, the partnership illustrates how software-led acquiring and embedded banking services are rapidly becoming standard expectations for SME customers, particularly those prioritising mobility, convenience and integrated financial management.