Can you give us a little background on what Traxpay’s role is within the payments industry?
Traxpay provides the world’s leading B2B Dynamic Payments solution uniquely capable of connecting global banking, rich transaction data, and B2B trade for the purpose of executing payments and final settlement in real-time, anytime, anywhere, and with complete visibility and control for buyers and suppliers.
Among today’s supply chains there is a greater desire for flexibility, transparency, and real-time responsiveness than ever before, but their rapid growth and increasing geographic dispersion has led to complications that impede instantaneous interactions. For example, it has become increasingly necessary for trading partners to collaborate outside of traditional office hours, bridge time zone disparities, and overcome the gaps created by lack of proximity, inconsistent processes, and dynamically changing business requirements. Moreover, B2B transactions involve multiple relationships within each corporation, complicated processes, and a long value chain that includes a highly fragmented banking network.
Our mission is to transform the way that companies pay and get paid, and to supercharge supply chains with faster, smarter, more transparent financial transactions so that both B2B buyers and suppliers benefit from the utmost in visibility and control.
What makes Traxpay unique is our patent-pending platform that combines secure, flexible, real-time 24/7/365 electronic payments with a rich communication and data aggregation facility capable of handling information of any type, (whether structured or unstructured), size, or format – and its ability to use this data to trigger event-driven payments. Furthermore, the Traxpay platform works within existing corporate work flows and processes enabling all systems across the supply chain to be synchronized and provide a single source of truth for all financial transactions.
How do you see the B2B payments industry evolving over the next five years?
With the ever-growing transition in the B2B space to digitization and collaboration, businesses will increasingly demand the same speed and flexibility that has become standard in B2C trade. Business, like life, is fluid and dynamic, and business people want to be able to get things done at the speed of thought—to notify, verify, exchange, initiate, modify, iterate, and collaborate across the supply chain anytime and from anywhere.
In the coming years we’ll see a continued increase in businesses of all sizes migrating to established B2B networks to manage supplier payments and indirect spend. And while these commerce networks have been enormously successful in connecting their customers with logistics providers, suppliers, and distributors, they now recognize the immense opportunity in also enabling end-to-end, closed-loop services to keep them and related transaction revenues on-platform. B2B network providers will begin taking advantage of the enterprise data they already have, and will be able to provide more transparent, convenient, faster and less expensive payments to their customers than a bank ever could.
In the $300 trillion market for B2B financial transactions, the world’s largest by far, two-thirds of spend is for direct procurement, and the ERP companies have done a good job of automating processes for this type of expenditure. The other third worth a whopping $100 trillion annually, however, is for indirect spend where the long-tail suppliers who aren’t on the platform are the norm, and this is where the true potential for B2B networks lies.
What is the most interesting change that you have seen in the B2B payments industry?
The awakening to the need and urgency for innovation in B2B payments – from banks, from supply chain software providers, and others – and to reinvent payments to match with global transaction requirements. And how they have missed the mark so far.
As the world of B2B trade has become smaller due to the internet where connecting buyers and suppliers around the world is as simple as connecting them around the corner, it has become clear that there is a massive gap in the last mile of the transaction – the payment and reconciliation – which severely limits visibility and control for trading partners.
In the past three years, there has been an arms race of sorts between supply chain software vendors as they attempt to close this gap by going beyond traditional P2P and O2C services, and adding payments in hopes of providing an end-to-end, closed-loop solution for buyers and suppliers.
In principle, this is the right direction, but has largely been a failure. The typical approach from these software vendors has been to partner with traditional static payment providers such as banks, cards, PayPal, and others whose legacy analog technology was never built for the complexities of B2B.
At Traxpay, we offer an entirely different approach to addressing this gap by integrating banking, transaction data, and B2B trade on a global basis, and we are pleased to have been selected as the global payments platform for the largest B2B networks in the world as they move forward in addressing the full end-to-end flow for their customers.
What is one way that Traxpay stands out against its competitors?
Unlike legacy static payment services which are disconnected from the rest of the process, Traxpay embeds Dynamic Payments directly into existing business networks and processes (P2P, O2C, ERP, etc.) and connects and monitors all associated transaction data along with the payment itself. B2B transactions regularly require payments to be split, combined, rerouted, canceled, partially refunded, factored, financed, put into escrow, executed on condition, paid on delivery, discounted, or in some other way dynamically altered during the course of the transaction, and Traxpay provides full track-and-trace capabilities to ensure all parties and systems are synchronized. Our event-driven workflow constantly monitors for changing terms, then executes and settles the payment accordingly, completing the last mile of the transaction, and enabling faster, safer, and smarter B2B trade.
In a recent blog from your company it was reported that 63% of Accounts Payable top priorities are focused around reducing processing costs. What is Traxpay doing to help with this top priority?
The typical “e-payables” workflow in AP departments for receiving, processing, and paying invoices to its suppliers simply isn’t sufficient to keep pace with the need for visibility and control of B2B payments. P2P and on the supply side, O2C, are related process. Ironically, though, there is no actual integrated “pay” component in either e-payables or P2P, and no “cash” in O2C. Payments are entirely separate and disconnected from these processes today.
While there are many claims of “payments” being part of the flow, the reality is that at best it is a static payment “instruction file” to a bank or a link to a payment gateway. Once the instruction is received and checked, various messages eventually wind their way through an enshrouded maze of the multi-corner banking process, shedding important data and remittance along the way. While this happens, both buyers and suppliers have zero transparency into the whereabouts, timing, costs, and remittance surrounding the transaction.
And at the very core of the problem is the fact that all traditional methods of B2B payment are “static.” Static payment methods, including bank checks, ACH, EFT, wire transfers, credit cards, pre-paid cards, PayPal and many more, require all variables to be fixed throughout the transaction lifecycle.
Since static payments don’t handle rich data, and are disconnected from the rest of the transaction flow, they are unable to adapt to any change requirements in the course of a transaction, or keep the associated data and systems up-to-date and in sync, which inevitably wreaks havoc on handling remittance and reconciliation. As a result, traditional B2B transactions are excessively complicated and time-consuming whereby 70% of orders and payments are handled and tracked manually.
The flexibility and combined capabilities of our B2B Dynamic Payments Platform addresses these issues. According to a 2014 Ardent Partners study, the average cost to process a “normal” invoice is $14.21. Exception invoices which account for approximately 30% of all transactions are far more expensive, often costing more than $200 to reconcile, or simply become non-recoverable and written off. With many companies processing in excess of 500,000 invoices per year, the overall cost to AP is enormous. So too is the reduction of these expenditures that our platform provides, but in addition, it also empowers companies to save time, reduce risk, and claim more control over their working capital and cash flow.
John Bruggeman
Chief Executive Officer, Member of the Board
Bruggeman’s extensive experience with enterprise software companies complements the banking and payment expertise of Traxpay’s executive team. Most recently John was chief marketing officer at Cadence, where he was responsible for corporate, product, and strategic marketing activities. Before joining Cadence, he was chief marketing officer at Wind River, where he oversaw product planning and management, corporate marketing, and field marketing. Prior to joining Wind River, John was vice president of marketing at Mercury Interactive; before that he was vice president of strategic planning at Netscape.
John has also held a variety of marketing positions at Alventive, America Online, Lucent, and Octel Communications. He holds a Bachelor of Science degree in statistics and computer science from San Jose State University and a Master of Science degree in mathematics from the University of Connecticut.