There is a growing need for businesses to have a complete, end-to-end payments solution that unifies incoming and outgoing payment processes within a single platform. ConnexPay is on a mission to offer exactly that.
ConnexPay, founded in 2017, initially served the travel industry but has since widened its scope to new verticals, including marketplaces, delivery services, ticket brokers, as well as emerging fintechs.
To lead ConnexPay’s global expansion, in early 2022 the company hired Anant Patel as president of international markets.
In this week’s Behind the Idea, Patel introduces the company’s technology and explains why it is focusing on growth.
Tell us more about your company and its offering
ConnexPay was born in 2017 originally to simply connect payments for the travel industry, and today supports many leading travel agencies, tour operators, and air and hotel consolidators. We continue to focus on travel while also serving other verticals that function as payment intermediaries, such as online marketplaces, delivery services, ticket brokers, emerging fintechs and insurance and warranty providers.
Over the last year, ConnexPay has more than doubled its number of active clients and its employee count. We’re also profitable, while offering market-leading rebates to our clients and processing billions of dollars in payments.
While some providers offer both card issuing and payment acquiring services, those offerings are in separate systems with disjointed reporting and reconciliation. What’s different about us is that ConnexPay’s technology seamlessly connects both sides of the payment ecosystem — accepting and making payments — inside a single world-class, global, cloud-based platform with instant access to incoming funds and just one reconciliation.
By serving as both acquirer and issuer, ConnexPay can easily connect payments coming in to payments going out and bring real value to both the consumer and merchant. While other companies offering issuing and acquiring require negotiating multiple contracts, working with various account teams and several technology integrations, ConnexPay requires just one integration point, one contract and one team. In addition to these platform and process efficiencies, ConnexPay also provides a lower cost of accepting payments and high card rebates, further boosting its clients’ bottom lines.
Our success over the first five years has seen us secure a major investment round of over $100million to continue our journey to simply connect payments for our customers.
What problem does your company solve?
The company is the brainchild of our founder and CEO, Bob Kaufman. In a banking career at US Bank, he experienced first-hand the needless pain that companies suffered in trying to access cost-effective payment services from an industry that was unable to meet their needs.
Bob knew he needed to disrupt the status quo by combining acquiring and issuing inside a single platform to not only solve those pain points, but to generate vast cost savings for companies and minimise risks.
Presently, there are serious inefficiencies caused by the payments process being disconnected, with issuing, acquiring and fraud prevention each taking place in their own ‘silos’, often implemented through entirely separate contracts even if they are from the same company.
One of the biggest problems is that merchants don’t have immediate access to funds that are being paid to them – they have to wait, potentially several days or even weeks, for monies to flow through the long and difficult payments process. In addition to the long wait times, there are significant fees incurred by having funds move through disconnected systems – every step of the process incurs more fees until each transaction is costing far more than it should.
Since launch, how has your company evolved?
The biggest change has been in our strategic decision to serve additional industries beyond the travel and tourism industry. Today we are poised to serve almost any company of medium size and up that functions as a payment intermediary.
Bob knew from experience that the travel industry was being poorly served by the existing payments regime – the sheer amount of fraud and chargebacks targeting the sector has meant that travel is classed alongside gambling and adult entertainment when it comes to risks and fees. Cashflow in the industry is also extremely fraught: if a customer buys a plane ticket through a travel deals site, then the funds may not be available to the travel deals company immediately due to the future delivery risk of the service; however, in order to buy the ticket from the airline, the travel company will need those funds.
If, as has often been the case during the difficult conditions for the travel industry during the pandemic, those funds are not on hand then it creates a major problem for the merchant. Our solution, which not only gives merchants immediate access to funds but also runs fraud analysis, gives merchants instant access to their funds, which in turn gives merchants the ability to gain rebates on their payments.
As we have progressed as a business, we have seen that our solution is applicable to almost any company that accepts a payment from a customer and matches it to an outgoing supplier payment. This evolution hasn’t meant changing our product, just changing how we communicate the product’s benefits and which companies we approach. The response has been overwhelming.
What has been the biggest challenge or most ‘tricky moment’ to overcome?
Whenever you are looking to overturn the status quo, there will be pushback and a sense that a solution like ours is ‘too good to be true’. Merchants are used to payment processes in which they have to wait several days or weeks to get paid, and they’ve factored this into the way they’ve worked for decades.
The biggest overall issue is education. Many people have never thought about combining pay in and pay out, because the entire payments process was designed with accepting and making payments as completely separate. If it’s always been that way, people wonder, then why change now? We understand why people may regard what we’re doing as being too good to be true, and this, ultimately, is a good problem to have: it means that we are truly innovating B2B payments and driving out archaic, disjointed payments processes.
What are your biggest achievements or ‘proudest moments’ so far?
In October last year we secured $110million growth equity investment led by FTV Capital, a sector-focused investor with more than two decades of experience in payments and financial services. Previous ConnexPay investors also participated in the round. This funding enables us to drive international expansion in Europe and beyond, as well as continually enhance our innovative payments platform. With this investment, ConnexPay has raised a total of $145million to date, which we’re very proud of.
FTV invests in companies that focus on enterprise technology, financial services, and payments and transaction processing, and we touch on all three. They have an extremely impressive track record when it comes to developing successful companies and a very hands-on approach – they don’t simply air-drop money on companies and expect a return; they actively work to help the companies they invest in achieve their goals.
How would you describe the culture of the company?
Bob and I have a goal of making ConnexPay the best company anybody has ever worked for. We are very focussed on making sure that our people are happy and thriving, because we know that employees who feel like they have a stake in the company are the best ambassadors for our brand. For example, there is a definite difference between interacting with a salesperson who is under stress from trying to hit impossible targets and one who likes their company and their product.
Very few employees ever leave ConnexPay – far less than the norm in our industry, and that is largely the result of our company culture that focuses on our people. ConnexPay is proud of our culture, where we drive for psychological safety as one team. Here our people feel comfortable voicing their opinions, which helps us build a safe environment for all.
We are customer focused and truly believe that behaviours drive our culture — and our culture drives our results — always working as one team to win. In addition, we have an unlimited vacation policy and generous benefits when compared to peer companies, and we are seeing how that generosity pays off with a highly engaged workforce.
As our company grows, it is going to be a challenge and a major priority to retain this culture. We are already expanding upon our success so far with initiatives like dedicated days off to do charity work — putting our people first by allowing and encouraging them to invest their time in helping others and giving back to causes that are important to them. We will continue to champion our employees to make sure that every one of them is having the best experience that they can possibly have at ConnexPay.
What’s in store for the future?
With significant investment under our belt and a huge surge in new customers, our immediate future is going to be focussed on growth. It will mean increasing our staff and reaching out to more companies in more industries to illustrate that our solution is applicable everywhere. We’re also keen to start the debate around why the payments process is the way it is — and how it can be better.
International expansion is also going to be a major theme. We’re adding more currencies to our processing capabilities. With the technology in place, we can build global client bases, becoming a significantly larger player in the payments industry – and we plan to spearhead conversation about how payments can further modernise and evolve.
For the industry as a whole, we’ve seen so much innovation in payments in the last few years aimed at superseding payments with cryptocurrency or central bank digital currency, but we would argue that the current payment system that people and companies are used to can be upgraded to be just as efficient as new types of payment, which often have significant downsides. ConnexPay is one example of this – we revolutionise the existing payments system rather than creating a new one from scratch.
Our past, present and future has been focussed on showing companies around the world that payments don’t have to be way that they’ve always been. They can be better, smarter, and more efficient than we ever thought possible.