Traxpay Reinvents Themselves as a Digital Lender

In the world of dedicated Supply Chain Finance platforms, there are not many vendors.  There are the two that have been around for some time – PrimeRevenue and Orbian, and more recent entrants such as Demica and CRX.

There is a big difference between dedicated SCF platforms versus SCF integrated into procure-to-pay platforms. Dedicated supply chain finance platforms are not about building a network. As opposed to building Buyer – Seller networks, supply chain finance platforms such as Orbian and PrimeRevenue provide a combination of bank to corporate integration, managed services (such as onboarding, analytics, etc.), multi-bank funding models, and supplier cash tools to run large scale supply chain finance programs.  They offer solutions for corporates to implement multi-bank funding solutions to the largest of suppliers.

We now have another entrant and it’s a bit of an old dog with a new trick. Traxpay’s original B2B network strategy of being a payment network behind SAP-Ariba, Tradeshift, etc. failed.  Investors lost patience and the company pivoted.

Today, they have become more a bank platform play, not a pure payment software play. Since Traxpay recognized payments is the banks’ domain, they looked to add value by connecting ERP systems and networks to banks. Traxpay approached banks and said look, so many players are trying to disintermediate you, we can help you, we have a platform to help you compete by enhancing factoring and down the road reverse factoring.

Right now their solution is being implemented by NordLB’s factoring business.

NordLB’s factoring division was receiving invoices on a manual sheet, everything was done manually, what invoices they accept for finance, etc. Traxypay is helping them to make that process digital. The corporate pushes Traxpay information on a daily basis (invoices), and NordLB can offer a factoring solution – monthly weekly or daily payout to corporate.

Now that Traxpay has entered the world of finance and technology, they will find this a competitive space as well.   The infrastructure is maturing to tie networks with funders.

Specialty Fintech lenders are starting to take advantage of the maturing infrastructure to:

  • Move B2B underwriting to as near to 100% automated as can be.
  • Use real-time data as opposed to third party data that is static, and contributes to fast decisioning.
  • Build decision engines that predict high ability to pay and manage losses to reasonable levels.
  • Use marketplaces developed for investors to buy assets based on risk / return models and distribute risk.
  • Build applications quickly by business people, without writing any computer code.

Time will tell if Traxpay’s pivot can compete.

For those interested in understanding this space more, please contact me at dgustin@globalbanking.com

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