With inflation still high compared to previous years and the allure of subscription services like Netflix and Spotify growing, consumers are understandably turning to alternative payment methods to manage household bills. Online prepaid payment platforms benefit from this.

That's the bet that Recharge, a major player in Europe's online prepaid payments space, is making today as it secures €45 million in debt financing with ABN AMRO as it considers expanding its market through an M&A round and venturing into fintech field. Styles' service could eventually compete with some of the larger payment platforms.

Through a series of digital coupons and cross-border remittances from Apple, Google, Spotify, Xbox, PlayStation and other brands, Recharge is attacking the market from multiple consumer perspectives.

The company said it already has strong cash reserves and claimed that revenue will grow 30% year-on-year in 2024, while aiming to achieve revenue of more than 100 million euros in 2025.

With the new funding, there will be considerable capital available for acquisitions.

In an interview with TechCrunch Recharge CEO Günther Vogelpoel said: “We see opportunities to grow faster through mergers and acquisitions, and there are many opportunities in other markets and segments that we can integrate, especially in this industry Still very young.”

The compound annual growth rate of the European prepaid card market from 2019 to 2023 is 7.6%. Between 2024 and 2028, the compound annual growth rate is expected to be 9.1%, from more than $251 billion in 2023 to $395 billion in 2028.

Even more interestingly, Recharge’s application for an e-money license from Dutch authorities suggests it plans to create a more robust “fintech” style platform.

Vogelpoel said Recharge is "very keen" to expand into financial services: "We are applying for an e-money license in the Netherlands, which will give us a European license. That way, we can launch our own financial services." He added that they would Looking for similar wallet or card type companies in the market "that would be a good fit for our current customer base."

But what about the next phase of technology? : “We are a profitable company,” Vogelpool said. "Our growth rate will exceed 30% in 2024, which also improves our profitability. So we have money in the bank to invest in our platform and technology."

He said it also makes sense to hold more funds for customers: "If you have a wallet as a core product, then you can connect other services to that wallet, as well as payments or cards that people can use to issue virtual cards. .... At Neobank we have a very good service portfolio, but we cater particularly to customers who like budgeting, control and who like privacy and security.”

He believes these privacy and security aspects may give Recharge an advantage, since prepaid can often provide greater privacy for certain services.

"We see great promise for Recharge's growth trajectory as it expands its presence in the global prepaid space," Bas Janssen, senior banker for digital and consumer clients at ABN AMRO, said in a statement.

In 2021, Recharge previously raised €10 million ($11.8 million) in debt financing led by London-based Kreos Capital, and in 2019 it raised €22 million from Prime Ventures.