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Traxpay GmbH: A Leading Player in the Financial Services Space

In the past few years, the FinTech space has emerged as a treasure trove of opportunities for those in the banking and finance industry.

This niche has also aided the inception of several significant companies that have brought about a paradigm shift in the way we conduct our financial tasks.

One such prominent name in the FinTech space is Traxpay GmbH, a fast-growing supply chain finance platform that operates globally from Europe with a multi-bank approach.

In an exclusive interview, Markus Rupprecht, the founder and CEO, sheds light on the company’s journey, the current landscape of the fintech space, and his vision for the company’s future.

Please brief our audience about Traxpay GmbH, its USPs, and how it is currently positioned as a leading player in the financial services space.

Traxpay is a fast-growing Supply Chain Finance platform that operates globally from Europe with a multi-bank approach. With the mission to become the “Platform of Choice” for buyers, suppliers and banks, Traxpay enables companies to manage their working capital in a simple, secure and sustainable way using all standard Supply Chain Finance tools.

Established financial institutions such as Deutsche Bank, Nord/LB, LBBW, RBI or KfW IPEX-Bank trust Traxpay’s financing solution and maintain strategic partnerships with the company. Through a new Sustainable Supply Chain Finance program, platform users can financially incentivize the sustainability of their supply chains.

Through the Traxpay platform, the process is fully digitized, making it efficient and transparent for both parties.

What other solutions does Traxpay offer, and how are these making an impact on the industry and your clients?

Traxpay offers the full range of SCF instruments for both Receivables Financing and Payables Financing on a single platform. The support goes far beyond providing the platform.

Through the early payment program Dynamic Discounting Traxpay corporate buyers offer their suppliers the opportunity to be paid early in return for a discount. Suppliers can thus generate short-term liquidity if required, and the Traxpay customer receives a discount in return for using their liquidity, thereby increasing profitability. In addition, Traxpay has developed an innovative solution to further increase the sustainability of corporate buyers and suppliers.

Traxpay also offers Reverse Factoring. Reverse Factoring allows corporate buyers to secure longer payment terms while providing suppliers with liquidity when they need it. This gives customers and their suppliers financial flexibility and creates a future proof process, strengthening both new and existing business relationships. A customer can work together with a bank or other financing partner of his choice, because Traxpay is an open platform.

When corporate buyers need a fast, agile conversion of receivables, they can use the Digital Forfaiting product from Traxpay, which enables the digital purchase of receivables to create additional liquidity.

The bank of the customer is usually involved in this process. The Digital Forfaiting Invoice Acceleration Program enables customers to generate additional liquidity quickly and conveniently at any time.

Clients can sell their outstanding trade receivables without recourse via the Traxpay platform, and they are able to release additional funds that would otherwise be blocked. One key advantage is the reduction of the use of overdraft facilities.

Since the start of 2022, Traxpay is offering a further product: Digital Guarantees. When suppliers want to reduce payment risk, they often secure their receivables with credit insurance.

Trade credit insurance remains very expensive or only available in limited amounts. With Digital Guarantees, Traxpay provides suppliers with a customized, secure, and cost-effective alternative.

This service allows suppliers to determine—according to their actual needs—the timing, term, and amount of payment protection to be purchased in conjunction with a Dynamic Discounting or Reverse Factoring program. Suppliers can benefit from the good credit ratings of corporate buyers by using Digital Guarantees while actively hedging the risk of non-payment in line with their needs.

Being an experienced leader, share with us your opinion on what impact has the adoption of modern technologies such as AI, big data and machine learning had on the finance niche and what more could be expected in the future?

The fintech Industry is greatly influenced and driven by technology. The velocity of change is increasing, and technology is the driver. Artificial Intelligence is a technology we need to work with, but it is not the only one. Most Fintechs already use AI-based tools. However, good, plentiful and clean data will continue to increase in importance.

Blockchain and Crypto are two technologies that the finance industry will also need to understand and work with. We feel that banks may end up playing a larger regulatory role in the future providing support for KYC and AML while fintechs will support banks in this process.

I believe we will see more and better financial services products for all verticals housed on platforms, with a far greater degree of personalization. Banks will probably provide more commoditized services e.g., in the regulatory arena.

Banks that succeed will become more contextual to stay relevant.  People will trust brands with the greatest relevance to them going forward. The payments process will be further embedded and integrated.

We like to consume, we are even willing to pay, but we hate the process of paying. Some countries are, of course further along than others in the tech game. This can be a matter of resources, regulation, or critical mass etc.

One issue that I see is the lack of understanding or perhaps sensitivity to regulation or compliance. FinTech companies, even some neo or challenger banks, seem to think that all problems can be solved via technology. This is NOT the case.

Tech may be the enabler; however, an effective policy framework, controls, and company culture play a major role as well as the availability of data! The results produced by “technology” will not be valuable if these results are not understandable and explainable to e.g., the regulator. If you want to be in the game, you must play by the rules. And when you deal with the same risks, you are eventually going to get the same rules!

Taking into consideration the current pandemic, what initial challenges did you face and how did you drive your company to sustain operations while ensuring safety of your employees at the same time?

We are a digital company. So, it was very easy to send our employees directly into a home office environment. Fintechs certainly had an advantage over the staff of traditional banks. Fintechs, like Traxpay, operate (primarily) digitally by design, be it the supply chain finance process via the online platform or the communication tools used by employees and customers.

As a result, everyone involved is already attuned to digital communication and has little fear of contact with online solutions. A majority of fintech companies, like traditional banks, have a fixed office location, however it is still much easier to decentralize tasks offering employees greater flexibility.

As we have seen, both flexibility and independence are becoming ever more important for workers and therefore the companies that employ them. If you want to be and stay attractive as an employer, offering the possibility to work from home and hybrid work is key.

In order to support the safety of our staff, we have asked employees to work from home given the high number of infections at this time. However, if someone needs to work in the office, we require same-day testing, regardless of vaccination status. Test kits are provided free of charge for employees to make this both easy and fully accessible.

What would be your advice to budding entrepreneurs who aspire to venture into the financial services space?

The path to entrepreneurship is exciting, fulfilling but also quite tough and rough at times.

  • Be strong! You will need to work harder and at the beginning you will make less money; especially if you were previously employed by a bank
  • Be positive! As an entrepreneur, you must learn how to fail fast and gain insight from your mistakes. So, learn from your challenges, but stay positive, even when negative thoughts arise
  • Be cool! Stay a “Why-Not” guy and don’t become a “Yes-Maybe” one
  • Be aware! And take a break if you need it
  • Be true to yourself! Do the right thing for the right reasons
  • Be a visionary! Never stop innovating
  • Be a networker! and build your network, constantly
  • Be bold! Take calculated risks
  • Ask your customers! Never assume you know more than they do
  • Have fun! Don’t found a start-up to get rich, but to learn faster and have more fun than in an established, more traditional environment

How do you envision scaling your company’s operations and offerings in 2021?

I believe in the power of cooperation and collaboration – especially with banks.

This can work if both sides—bank and fintech—see a benefit and agree to cooperate. The ability and willingness to compromise are key. In the past, this type of cooperation was more difficult. Politics, culture, and KPIs/bonuses kept bankers from taking risks, choosing a new and different path, and innovating.

Being “daring” was a good way to lose your job…. quickly! The mindset prevalent in banking is changing! Being innovative and entrepreneurial is finally being considered an asset. Everything no longer “needs to be made here” to be relevant and appropriate, allowing for real partnerships of “equals”.

In the beginning, fintechs were giving away their know-how for free…in order to get into the game.  In the future banks need to both pay…and play their part in bringing business to the table. This will support better and quicker scaling of new ideas business models etc. If the banks continue to maintain the client relationship, this will put them in an ideal position to partner with bank-friendly platforms such as Traxpay.

Supply Chain Financing is one of the rare products that creates a win for all participants including the bank, the corporate buyer, the supplier, and the platform.  By producing benefits for all parties, we have a quadruple win that will provide scale and in fact geometric growth over time, because everyone gains.

As a platform, we are building additional products and services that will benefit all our bank partners, corporate buyers, and their suppliers as well. The combination of the right offering, great people, and valuable partners is a powerful recipe for growth!

About the leader

Markus Rupprecht is CEO of Traxpay, a fast-growing platform for supply chain finance. Markus started his career at Deutsche Bank and subsequently worked for various technology companies. In 2009, he founded Traxpay, at a time when the term “FinTech” did not yet exist.

Five years ago, Markus pivoted the company away from the overcrowded payments space in order to support corporate buyers and their suppliers in the area of Supply Chain Financing. Markus Rupprecht recognized that the challenge was basically the need for flexible, sustainable, short-term liquidity at a more affordable price. Corporates also wanted to support their suppliers, while banks were looking to maintain client intimacy in order to continue to service their relationships.

However, corporate buyers were increasingly searching for multi-bank and bank-agnostic platforms.  The idea was born to create a robust, bank friendly “platform of choice” for companies, suppliers, and banks.

Exhibiting Excellence

“With Traxpay’s dynamic financing platform, our suppliers have the opportunity to accelerate their outstanding invoices when they want to improve their liquidity. Suppliers decide when they want to accelerate. This early payment option gives them access to additional liquidity at comparatively low financing costs. For us at Landgard, this is an important step in strengthening our supply chain, increasing transparency towards our suppliers* and digitalizing our processes,” explains Michael Maas, Division Manager of Finance and Accounting at Landgard.

“The simple and intuitive operation of the Traxpay platform enables our suppliers* to manage their liquidity with just a few mouse clicks. They can simply request early payment of their invoices in exchange for a small discount. For the suppliers, the use is free of charge. We are also working with Traxpay to offer our suppliers* other value-added solutions soon.”

Press release from November 16, 2021.

“With Traxpay, we can access the full range of SCF instruments for both Receivables Financing and Payables Financing on a single platform – with maximum flexibility and minimal implementation costs,” explains Steven Williams, Director Treasury & Investors Relations at ADVA.

“Traxpay’s support goes far beyond providing the platform, however. Traxpay takes a lot of the onboarding work off our shoulders and knows exactly how to select suppliers and approach them correctly. It was especially important for us to develop an innovative solution to further increase our sustainability activities.”

– Press release from November 19, 2021.