Mobile payments start-up Droplet is targeting big banks after raking in 575,000 through equity crowdfunding platform Crowdcube.
The British firm gave up 12.5 per cent equity to 327 investors to raise the cash, and aims to shake-up mobile banking with a free cash transfer app for smartphones.
While its free service will have paid-for extras aimed at business users, Droplet hopes the free offering will attract bank customers tired of paying fees to transfer money.
CEO and co-founder Steffan Aquarone said: "It's a painful pill for the big players in the industry to swallow but in today's world, people won't do what their bank tells them to.
"This isn't because they hate their bank: it's because fundamental shift in consumer behaviour.
"Now, when people see something new that they like, they can switch to it in a few seconds. Despite huge investment, the traditional players are struggling to build intuitive, mobile-ready payments systems that people want to use."
While some banks do offer a transfer app, like Barclays' Pingit, they are coming under pressure from start-ups like Droplet offering mobile banking.
As a result, they're rushing to develop their own - a recent Ovum study found that84 per cent of banks and retailers are currently planning to invest in mobile payment technology within the next two years.
But there's a key difference between banks' offerings and Droplet's, according to Aquarone.
"Droplet is founded on the belief that you can do payments differently, with absolutely no transaction fees for merchants or consumers," he said.
"We are the only payments system in the world to take that approach and I think the attention and funding we've gathered on Crowdcube shows how much people like that idea.
"We're now looking forward to using the funds raised to help further disrupt the payments industry it certainly needs it."
Droplet's plan is to make ambassadors of its investors, establishing communities of users in various cities.
It aims to do this in 20 locations including Brighton, Cambridge, Exeter, Glasgow, Leeds, Norwich and Sheffield over the next 12 months.
Google recently announced its own revamped payment service, Google Wallet, following its partnership with Softcard. This service will go head-to-head with rivals such as Apple Pay and PayPal.
