Mumbai headquartered PayMate has come a long since its inception days of 2006. From being India’s first mobile payment provider that helped people to receive & make payment through SMS to making an important pivot and then eventually becoming one of India’s most successful B2B Fintech startup. Today PayMate most certainly epitomizes the journey of every successful Indian startup.
PayMate’s recent funding of $25 Mn from payment giant Visa and other prominent investors was yet another validation of its success and bright prospects of the company. After having forged partnership with Visa, now this decade old company is firmly eyeing on international expansion. It is planning to aggressively expand across European, Middle Eastern and African countries.
On the domestic front, this Fintech firm has its feet solidly entrenched in the B2B payment space. Today scores of SMEs and enterprises hailing from across the sector are lapping up PayMate’s digital payment solution. The solution is helping the SMEs to seamlessly digitize their payment cycle and absolve them from great deal of inconvenience that traditional payment method enforces. In terms of sheer numbers, the company claims that its revenue has jumped 400% over the last one year and recorded $5 billion in processing volumes.
As PayMate readies to embark on yet another exciting journey, Techpluto had the pleasure of speaking to PayMate’s founder and CEO Mr. Ajay Adiseshann. In this exclusive interview, Ajay Adiseshann spoke about the recent funding, international foray and other important aspects with regards to his company and the B2B payment industry.
Q) Firstly, heartiest congratulations for your latest fundraising round. Following the latest round, financial multinational giant Visa has become PayMate’s new investor. Can you please share your thoughts about the same?
Ans – We are excited to have Visa come onboard as an investor which further deepens our existing partnership. Having access to the world’s largest card network and their platform will help us in scaling our business in India and expanding globally as we well.
Q) How PayMate will utilize the latest capital infusion?
Ans- We plan to invest the funds in 3 primary areas in order to grow the business –
- People: We plan to hire new talent for both India and global operations
- Product: Focus on investing in product development and even acquihires to accelerate product development
- Global expansion: Setting up operations in GCC and beyond into CEMEA
Q) Along with domestic market expansion, PayMate recently stepped up its focus on the international markets. How do you see international markets panning up in future in terms of its contribution to company’s overall growth?
Ans – We see a lot of potential for ourselves in Central Europe, Middle East and Africa as commercial payments are pegged at $8.7 trillion for the region. This gives us an opportunity to work with Visa’s card issuing bank partners and their customers to help streamline their B2B payments and digital workflows. We are looking at 25-30% revenue from the CEMEA region in the next 24-36 months.
Q) Can you please enlighten us how today PayMate’s digital payments solutions are helping SMEs in cutting their operational cost and improving cash flow?
Ans – PayMate offers a B2B payments platform that helps Enterprises and SMEs to digitize their entire procurement-to-payment cycle. The platform improves the efficiency for its users thereby transitioning them from traditionally slow and costly forms of payments such as cash and cheques to real-time digital payments.
We work with Visa and leading card issuing banks to facilitate both payables and receivables across supply chains. The platform also features a complete Procure-to-Pay solution, Invoicing with discounting options, along with APIs for integration into existing accounting backend for minimal friction-based deployment. It is a cloud based offering and accessible across all form factors.
This helps ease everyday time-consuming tasks such as receiving and making payment, invoicing, reviewing and approving payments, managing cash flow, managing working capital needs. For most businesses these are manual, paper heavy and inefficient processes that end up costing business more time and money.
As we expand our outreach and enroll more SMEs, they stand to gain greater access to markets and also tap into our technology infrastructure which eases – friction and speeds up the flow of funds through our integrated cloud based B2B payments platform, and enables automation of payables and receivables on a single platform.
Q) Last year PayMate forayed into digital lending space with the acquisition of Z2P Technologies. How is the new business panning up and any major future plans for the same?
Ans – With our acquisition of Z2P last year, we are building a credit engine which when combined with PayMate’s B2B payments platform will revolutionize the way businesses manage their payment operations, cashflow, and access to growth capital. We also intend to partner with banks and NBFCs to improve the flow of credit to SMEs.
Q) Any major predictions about B2B payment market with regards to foreseeable challenges and opportunities?
Ans – In B2B, the opportunity is beyond payments within supply chains, where the digitization of processes along with reconciliation, discounting payments and credit on tap is where the opportunity exists to unlock value for these ecosystems. The opportunity to bring a balance between Enterprise and SME, to extend payables for enterprise and to provide timely or early payments to SME where cashflow is lifeblood. The use of cards to automate these payments is a technological advantage but to manage the costs for these card payments where margins are low for businesses becomes a challenge.
The other challenge is across traditional industries, archaic processes and systems which are manually managed today are fairly difficult to dislodge since there are a myriad of interdependencies.
Therefore, pricing, along with the ability to overcome inertia becomes critical to the value proposition, however elegant or cutting edge the product or solution might be.
Q) Your thoughts about the current competition in the B2B payment industry?
Ans – Both in India and globally, the pain points for both domestic and cross border payments along with work flows and reconciliation are moving towards faster payments and settlements. Fintech players across geographies and across verticals are playing a critical role along with the incumbents in solving for these problem statements. B2B payments are more complex in nature and many niches exist for multiple players to thrive in across geographies. Competition from incumbents and new players will always exist and competition is good since it keeps you on your toes and ultimately the better products and better models will get larger market shares but B2B is not a winner take all market.
Q) Interestingly, PayMate was initially started with the aim to help customers send and receive money through text messages. How and when did you exactly think of giving a new direction to your company by pivoting it into B2B payment solution?
Ans – PayMate was founded to leverage mobile technology for payments in a cash dominated society. This was a first of its kind product in the market, pre app economy, before data became mainstream and smartphones became ubiquitous. As we were building the consumer business, we received use cases in B2B flows which we accepted. Over time we found the B2B payments more interesting and scalable with the right unit economics. With this realization, midway through our journey, we decided to ease out of the consumer business and focus purely on B2B payments.
Q) PayMate happens to be your third venture. Looking back at your decade long career as an entrepreneur, what advice you’d like to give to all those who want to take on the entrepreneurship flight?
Ans– My advice to budding entrepreneurs is always think long and hard before taking the plunge. The road is fraught with perils, takes much longer than you think to get to steady state and you will have to dig deeper than you ever have in your career. But, it’s also super rewarding and worth a shot whether you succeed or not.
Q) Your sincere thoughts about the cruel fact that 90% of startups end up as failure?
Ans – That is the nature of the beast. The best teams which are able to convert an idea into a product, find the right market and then build/scale the business will stand a better chance of succeeding. Even then, there might be uncertainties which could result in failure. In most startups one or more of these might be missing, so failure is almost certain. Also, able to find adequate capital at the right times could also be the difference between success and failure. And finally, resilience is the underlying team quality without which failure is almost certainty.
But on the positive side, teams that fail sometimes comeback with the invaluable experience that failure provides and bounce back with another idea to win the next time around. Startup ideas that did not make it can be invaluable to other teams as well in their quest for success. Failure benefits the ecosystem and makes it better and stronger in the long run.