Anyone in the payments industry knows how hard it is to make any kind of substantial change to the payment methods businesses use. It’s a huge opportunity for process improvement, but one that is extremely challenging. Each business has their own unique process, which has evolved over the years and is no doubt engineered to be the best accounting and payment process tailored specifically to that company.
Complicating matters even further is that the invoices are created from the Accounts Receivable department of the vendor, while the payments are issued by the Accounts Payable department of the customer. This very organizationally-based structure makes it difficult to gain cooperation and compromise.
The question is, can the German engineering of Traxpay be applied here to solve this very basic business problem?
Earlybird Venture Firm seems to think so, and has plunked down $4 million on what they describe as “one of the most disruptive technology solutions since PayPal reshaped the B2C payments market”. Disruptive might be the investment buzz-word du jour, but disruption is the last thing businesses want in their accounting departments. Combine this accounting disruption with the concept of storing money in accounts that are not really bank accounts and you’ve just created some pretty strong barriers to overcome.
If only some lucky start-up or tried-and-true payment processor could make it as simple to achieve real-time payments as it is to use your iPad. Time will tell if Traxpay will play a significant role in the B2B payment processing space. One suggestion, change the name, it sounds too much like “tax pay” which no one likes to do.
Source: TechCrunch June 2012