The capital will be used to build the business’ team and product as well as expanding its merchant base, according to a statement.

GoCardless’ services works by providing a payment platform that allows merchants to take payments online via direct debit. After first use of the service, users can then authorise future payments anywhere that the service is offered with one click.

Oxford graduates Hiroki Takeuchi, Tom Bloomfield and Matt Robinson originally founded the London-based business in 2010. The group then participated in the YCombinator summer program in Silicon Valley in 2011 to develop the company.

Adam Valkin, partner at Accel Partners, comments, ‘There remains tremendous opportunity for innovation and simplification in the payments sector.

‘GoCardless has developed an easy to use service that addresses a real pain point for merchants. They have impressive traction in the market and we are very excited by the ambition of the team.’

After launching a beta version of the service in late 2011, GoCardless has signed up 300 users including Kashflow, an online accounting service for small to medium-sized enterprises.

For Accel Partners the deal follows soon after committing £5 million to German mobile gaming company flaregames and the Series B backing of online fashion website Stylistpick in a £7 million transaction.