• Traxpay and the Remaking of B2B Payments  
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Traxpay and the Remaking of B2B Payments

After spending several years working for big banking and FinTech companies, it became clear that the established players in the payments market can’t address the payments challenges and complexities related to B2B transactions. Coincidentally, it was at this time that a former colleague of mine came to me and enthusiastically told me about a new award-winning startup in B2B payments called Traxpay. He told me that Traxpay didn’t just want to improve payments incrementally, but had been reinventing the concept of B2B payments entirely from the ground up, and delivering a disruptive platform that would forever change the landscape for B2B commerce. Needless to say, I hadn’t heard this kind of thing everyday in the usually sleepy world of payments, so I decided to check it out for myself.

Before I made ​​my decision to start as a Product Manager at Traxpay, I occupied myself with the following questions:

  • Why does a company need a bank for payments?
  • Why do money transfers take so long before they are credited to the recipient?
  • Why can a financial institution only handle 140 characters of data in a standard payment transfer?

A monetary transaction absolutely contains more transaction and remittance information than what could be captured in a tweet!?

Companies send and receive hundreds, or even thousands, of payments every day. The synchronization of data (P2P, O2C, accounting, ERP systems, etc.) and banking is only one of the many challenges that a CFO must face. Even small deviations in the amount or reference of a transfer entail laborious and cost-intensive research work in reconciliation or accounting. Key issues for the coordination between ERP systems and bank accounts run the gamut, but a couple of freqeuent offenders include:

  • Why did the buyer pay less than agreed to in the invoice?
  • Why does the remittance of the transfer differ from the specified invoice reference number?

Additionally, if you put payments in an international or cross-border context, due to obscurity in correspondent banking relationships and the associated fees, the cost and delays of financial transactions are completely unpredictable. Here are just a few challenges in international payments:

  • Transfers take several days to weeks to be credited to the recipient’s account
  • Every bank in the correspondent banking system demands their own set of fees for sending and receiving payments and remittances
  • Transaction data cannot be fully transmitted due to incongruent banking systems

One of our customers has cut right to the heart of the matter: “I can reach any person on earth from anywhere and at any time by mobile phone. Why can’t I do that with a cash transaction as well?” Another customer said, “It would be faster for me to put cash into an envelope and send it via regular mail than it is to send it via my bank!” Sad, but it is true.

Many of the payment systems still in use today are relics from the past, which have their raison d’être in any case. The problem is that today’s storm of data can’t be adequately managed by these systems. And unfortunately, 140 characters for reference and/or waiting for days to receive money no longer meets the challenges of global competition.

Traxpay is giving B2B companies the ability to connect, collaborate, and transact in a way that was never before possible, and putting control back into the hands of trading partners instead of financial institutions. In this context, the following quote fits very well on why I’ve found my new home at Traxpay:

“I do not concern myself with what has been done. I’m interested in what needs to be done.”
-Marie Curie, Nobel laureate of physics and chemistry, 1867-1934

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