Fintech Valley Interview – TRAXPAY – a company profile

Today we present you the second on our series of profiles of Fintech companies around the world. In this occasion we are are proud to introduce you TRAXPAY, a German Fintech with offices in Frankfurt and in Mountain View. The company provides: “…cloud-based B2B Dynamic Payments platform provides secure bank-grade and regulatory compliant financial process automation and B2B payments services to corporates, digital marketplaces, and B2B commerce networks…” More about them under:


FintechValley: Could you please give a short description and history about Traxpay for those companies and audiences that are not familiar with the company and the products?

Traxpay was founded in 2009 and left stealth mode in late 2012 with the goal of revolutionizing B2B trade to change the way companies pay and get paid, and to accelerate supply chains with faster, smarter, more transparent financial transactions. Traxpay’s B2B Dynamic Payments Platform provides the world’s only solution capable of connecting banking with rich transaction data, making it possible to execute payments and final settlement in real-time, anytime, anywhere, and with complete visibility and control for buyers and suppliers.

FTV: What are the Unique Selling Points of Traxpay, what value do you bring to your target audience?

What makes Traxpay unique is our B2B Dynamic Payments 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.

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 are complex, and 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. 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.

FTV: Where are the Traxpay Headquarters? Is there any special reason for settling the company here? Do you have regional offices in other countries?

Traxpay’s headquarters are in Frankfurt, Germany, and our US office is in Silicon Valley, in Mountain View. The company being founded in Germany came about primarily through its founders who were senior executives in major German banks and IT companies. They recognized that disruption in the financial sector, particularly in the B2B space, was long overdue so that companies could transact and interact with the same level of transparency and flexibility that any consumer has come to expect. Frankfurt, one of the most important financial hubs in Europe, was an obvious choice.

FTV: What has happened in the last years to the main Financial Corporations to finally adapt new technologies? Do you believe they are reacting quick enough?

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. According to a 2014 Ardent Partners study, the average cost to process an invoice is approximately $14.21. With many companies processing in excess of 500,000 invoices in a given year, the overall cost of this function is enormous.  These are all pain points that have long existed, and since traditional banks have not taken the initiative to modernize their systems to meet the needs of modern businesses, we are seeing many young, motivate Fintechs coming to the call.

FTV: In your option, how relevant are the following 5 factors in the success of a Fintech Company. Can you please grade them with a percentage of relevance. (20% for each one of them, for example, would grade all of them as equally important.) Please feel free to add an extra factor that you believe could be important:

Consumer adoption: 10% (in this case corporate adoption)

Technology: 25%

Marketing budget: 10%

Human talent: 25%

Investors: 30% (to provide trust to business customers)

FTV: Has it become easier for you to reach Finance corporations and make them hear what you have to say in terms of finance innovation?

Globalization means that more and more companies are trading internationally, and as such, the already complex relationships between buyers and suppliers are poised to become infinitely more complex. Corporate treasury, strategic sourcing and accounts payable professionals are beginning to see the potential for greatly optimizing work flows and business interactions, for lowering costs, and for ultimately transforming electronic payments and transaction data into a strategic asset.   

When Traxpay’s B2B Dynamic Payments Platform came out of stealth mode and onboarded its first customers in late 2012, the Fintech space was still in its infancy, and, at best, people associated FinTech with B2C payment systems such as PayPal. What many people don’t realize is that the global market for B2B transactions is worth over $300 trillion annually, literally dwarfing B2C. We have come a long way since then, and our argument for streamlining processes and sinking transaction costs through efficiencies and transparency are definitely being heard and understood.

FTV: What is the most important market for Traxpay? What are the next plans?

Certainly the B2B E-Commerce market represents a gigantic opportunity. While B2C e-commerce has been growing at a steady pace over the past 15 years, B2B e-commerce is now the market segment experiencing the biggest growth. At over $500 billion in estimated total sales, the market is an increasing target for innovators, developers, and retailers. Some analysts report that the B2B e-commerce market is ten times that of B2C e-commerce, and procuring via online channels for B2B is rapidly becoming the norm.

E-commerce is a key driver of the future of commerce worldwide. With more than 40% penetration (approximately 3B people) of the world’s population using the Internet today, up from less than 1% in 1995, it is safe to say that today almost every company in the world has access to the Internet. With access, these companies also have the ability to buy or supply via the web. Today buyers and suppliers in the B2B segment have a very high level of acceptance and readiness to conduct commerce this way as well.

The global commerce potential is massive, but there is a looming issue in the area of payments. Traditional payments, be it via banks, credit cards, or other electronic means, have simply fallen short when it comes to B2B payments due to fraud, loss, data, real-time, push payments, etc. With the influx of electronic payments and the increased recognition that cross-border payments must become faster, safer, and smarter to support what is now global commerce, businesses are looking for payment solutions that address the needs of modern business.

FTV: In your point of view, when is regulation good for Fintech and when is it bad for Fintech? Is regulation helping or deterring financial innovation?


SEPA which allows access to all SEPA markets and means companies can do business in all countries with regulation required only in their home market

Startups push the boundaries of compliancy, making use of every possible opportunity while traditional banks take a more conservative approach. Just one example: conversion-focused startups today use video identification to get through the KYC process in five minutes. Banks, on the other hand, still favor the old-fashioned, sluggish PostIdent for customer identity verification. 

PSD2 – XS2A: XS2A requires banks/incumbents not to block Fintechs by freezing APIs. Compliance in this case fosters innovation


Compliance should be a level playing field across Europe but from the German point of view it isn’t. Germany’s BAFIN regulations are usually stricter than in other countries (KYC methods) with some EU member states offering lower compliance requirements to gain a local competitive advantage

Long regulatory approval lead times for business models are not in sync with investment speed and cycles resulting in slower progress from idea to product, which some investors do not accept

FTV: Which is the Fintech capital of Europe in your point of view? Why? Is there a recipe or formula for being a successful Fintech capital?

Undoubtedly that would be London where over $5.3 billion of capital has been raised for Fintech companies since 2010 with $4.4 billion having been invested during this time across the rest of the continent. I think this is due primarily to London’s unique situation of having traditionally been the hub for international finance and banking in part, of course, through their lack of language borders. London also has the fortunate situation of having traditional banks, governmental institutions and tech startups all in one city, which can’t be said of other European countries or even of the US. Access to the investment community, knowledge transfer, angels and incubators, is a tremendous advantage in this regard. Also the local and national governments have one of the most business-friendly approaches by coaching Fintechs in the areas of compliance and financial regulation.

FTV: London has innovated tremendously as finance market, what can other European capital cities learn from them?

In part by doing what I describe above, and in this regard, Frankfurt really is making waves. There’s a Fintech meeting or conference of some kind almost every week, and some very big and established companies including banks have started incubators which focus on funding and supporting the innovations of young companies with superior technology.

FTV: Please feel free to add other points if you like

High-speed networks, mobile computing, and intelligent devices are all technology trends that should be accelerating the pace of global B2B commerce. They should be creating opportunities for supply chain partners to conduct business in new and creative ways, while making it easier for buyers and suppliers to trust each other and transact quickly and confidently. But traditional B2B transaction systems are disconnected, sluggish, stand-alone legacy solutions that slow the pace of commerce and make it difficult to optimize cash flow, working capital, and liquidity.

While transactions are fast, fluid, and inexpensive in the consumer market, the B2B market which is many times larger in size, they are antiquated, and often leave companies virtually in the dark about cash flow realities. For example, recent research shows that:

78% of companies cannot forecast mid-term cash flow within 5% accuracy

59% of CFOs report issues caused by poor visibility and control of supplier payments

More than 30% of B2B invoices are paid after the due date, if at all

The consequences are substantial. Today, businesses spend nearly $1 trillion in fees to intermediaries just for the privilege of making slow and inefficient payments.

There is also latency and a lack of transparency associated with financial flows in the supply chain. Transaction times can span up to five days after a payment has been made, but before the payee has access to use the funds, and even longer for international transactions. Moreover, partners have limited visibility into transaction data; payments aren’t executed, cleared, and settled predictably; and any change to the “who, what, when, where, why, or how” of a transaction can result in significant costs, delays, chargebacks, and disruption to the business.

FTV: Thank you very much to Traxpay.

More about Traxpay:


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