B2B Payments

How to Disrupt B2B Payments With One Word: Traxpay


How big is the B2B payment market?  “Four times massive” is how Traxpay CEO John Bruggeman would define it. Bruggeman and Traxpay just snagged $15 million to get its slice of that massive pie. Bruggeman told MPD CEO Karen Webster why Traxpay’s investors find its Dynamic Payments platform so appealing,  why large enterprise customers do too and what he plans to do when he enters the U.S. market next year.



Traxpay is a Dynamic Payments platform that is redefining how businesses pay one another. Today, the company breaks news that it has closed its series B funding for $15 million. That prompted the natural question from Karen Webster, why are investors so bullish on Traxpay?

According to Bruggeman, there’s one easy answer: it managed to solve a critical problem uniquely in a massive market.

Bruggeman characterizes the B2B payment market as “four times massive” – one that is easily three to four times bigger than the B2C payments market.  Bruggeman says that B2C, alone, is a massive market, but B2B is quadruple its size.

And that is what makes it so appealing to Traxpay and its investors.

“Even if we just have a modicum of success, a modicum of success in a huge market is a huge success,” he said.

Second, Bruggeman says, investors look for disruptive technologies. Traxpay’s Dynamic Payments platform is redefining the way the B2B market segment is going to look at and execute business transactions going forward.

“What investors ask is: Does this disruptive technology solve a compelling problem that customers will pay a lot of money for?” said Bruggeman. “The good news is the problem has intercepted our disruptive technology at the right time and the right place.” The problem that Traxpay solves is one that is endemic across vertical markets, across geographies and jurisdictions. Traxpay is delivering “good traction and good results” in the enterprise payments area for some rather large enterprises, where the volumes and activity levels are significant.

“Closing a B-round requires traction. It requires actually delivering on promise of our value proposition to the market, so I am very proud that our performance is such and that our results are such that we were able to close, and in our case, an over-subscribed round,” said Bruggeman.

Webster asked what Bruggeman and team plan to do with the proceeds. No rest for the weary, he says.  “We’ll use the money to accelerate the scale of the business, as customer demand has forced us to grow faster than their original business plan.”

And that means entering the U.S. market. Traxpay, Bruggeman says, solves a global problem, but they’ve been “pretty landlocked in Europe” thus far, and now we have the ability to break out.

“We are being asked to move very aggressively in the US market space and then to Asia,” he said. “This really is a geography scale first and a channel and technology scale second.”



During their last conversation, Bruggeman told Webster that the B2B market is a massive opportunity and massive complexity of scale, and there’s a good amount of time required to get to that level of scale. B2B, said Bruggeman, is broken. So how, asked Webster, has Traxpay managed to solve that scale and time problem?

An insightful problem and one that is the core and essence of problems that all start-ups face, responded Bruggeman, is the question, “How do you jump the castle? How do you move to scale?” The Traxpay approach has been to do so with their friends, so theirs is a “highly leveraged model” that is result in a significant partnerships.

“The lead investors in this recent fund raising were Commerzbank, , and its new corporate incubator called main incubator, along with Software AG, a global leader in enterprise data across 15 different market segments.  Our channel model is a leveraged channel model. So rather than going directly to buyers and suppliers, we sell to B2B network companies that have already assembled large networks of buyers and suppliers.”

“My theory is, hey, it’s always good to take a little help from your friends.”



B2B networks, said Webster, is not a new concept. It’s been around for a while, but has sort of flopped around and hasn’t gone very far – in fact, many imploded. Why, asked Webster, is the concept of B2B networks different now? Why is now the time for them, with the underpinnings of Traxpay, to actually make a difference and flourish.

First, to clarify, Bruggeman explained that when he talks about B2B networks, he is talking about software companies that sell their software to buyers and their supply chain. The real value is that they connect those buyers and suppliers through, typically, an invoice or a payment instruction.

Those are the real two connection points, he said. Invoice going from seller or supplier to the buyer, and then the payment instruction coming from the buyer’s bank, and then ultimately triggering funds into the supplier’s bank.

“These software companies, I would contend, have done a good job assembling very large active networks that are sending data back and forth between buyers and suppliers, whether that information comes in form of an invoice or a form of a payment instruction or EDI data,” said Bruggeman.

These are healthy, active, large growing networks, companies that have achieved scale, he said, but they haven’t completely fulfilled their promise. They have done a good job connecting the buyers and suppliers with data, but “they missed the last mile.”

“They can set you all up so you have all this information about payment, but the money doesn’t actually move, which is a key component,” he said. “They really haven’t delivered on top of the network in a scaled way.”

Traxpay’s value proposition to the company, he explained, is that it will connect the money to the data and will make sure that the money and the data move together. It moves them in an XML object called a “financial object.” The Traxpay financial object contains ERP data, purchase to pay (P2P) data, order to cash (O2C) data, and CRM data. It also contains non-structured data like contracts, and it’s attached to financial flow.

“Now, the money, rather than being dumb money moving through a bank network, becomes very, very intelligent money. It knows who it is, how it got to be what it was, what business terms or conditions happened, and what events or stage happened along the way. It’s all that you need to fully settle in and reconcile the promises that the software companies have made,” said Bruggeman.



Something that affects how money and data move together is the need for real-time, same-day payments – faster payments, noted Webster. And people seem to have a different way of describing that ability for money to be moved and immediately made available to the receiving party. How, then, is this affecting Traxpay?

“This is a really interesting conundrum. In this exchange, in a perfect world, the receiver would want the money in real-time, and the sender would want to give the money as far out in the future as possible,” said Bruggeman. “What we’re seeing is the emergence of supply chain applications that are enabling this, where I, as a buyer pay much, much later and you, as a supplier, get paid instantly.”

Bruggeman explained that we are increasingly seeing the emergence of these applications and that they are coming in a category called “supply chain financing.” Their applications, like buy-side factoring, supply side factoring, silent factoring, dynamic discounting, instant pay, early pay, and extended pay, are applications that were traditionally very manual, very hard to scale down deep into the supply chain.

“These software companies that I talked about have the data to enable these supply chain-financing applications, but they don’t have the payment component to actually complete the process,” noted Bruggeman.

For example, earlier this month, the niche purchase-to-pay software company Basware introduced three applications: Basware Pay, Basware Discount, and Basware Factoring. Previously, no one thought of Basware as an application company, said Bruggeman. That was just proof that these software companies “have the data, and are finding ways to attach the payment, offering these value added applications to their customer.”

Basware, he added, is not alone in that category – many software companies have announced or are on the path to announcing similar kinds of value added services. “These services are really ways for buyer to delay payment and ways for supplier to accelerate payments.”



There are lots of other ways to innovate in B2B or enterprise payments. But where is innovation most needed? According to Bruggeman, that’s like asking “there are an infinite number of problems, but which one do you start with?” A business could start anywhere and not be wrong

“We have been around since 2009 and we have seen most of the different B2B opportunities. I’ll tell you that we started getting the traction, really accelerating the growth our company, by helping these software companies, B2B networks, market places, and online market places enable online dynamic payments between buyers and sellers,” he said.

But that, responded Webster, implies that there are other foundational elements in place in order for Traxpay to have done that. Bruggeman agreed, saying that for one, they needed software companies “to want to prioritize, build new products, and go after new lines of business.” Traxpay was lucky to hit an investment cycle from these software companies.

Next, banks and third party financers had to want to fund these kinds of initiatives. Traxpay hit an up-cycle on the availability of money, but the difficulty was high for the mid-market to access that money, so they needed that to happen, he said. And finally, Traxpay needed a broad-based adoption of cloud technologies like the technology it delivers.

“So, it kind of takes the marriage of business opportunity and technology opportunity coming together at the right time for it to become a priority area in the B2B payment space, and that’s really what happened,” said Bruggeman.


John Bruggeman
CEO, Traxpay 

Mr. Bruggeman’s extensive experience with enterprise software companies complements the banking and payment expertise of Traxpay’s executive team. Most recently John was chief marketing officer at Cadence, where he was responsible for corporate, product, and strategic marketing activities. Before joining Cadence, he was chief marketing officer at Wind River, where he oversaw product planning and management, corporate marketing, and field marketing. Prior to joining Wind River, John was vice president of marketing at Mercury Interactive; before that he was vice president of strategic planning at Netscape. John has also held a variety of marketing positions at Alventive, America Online, Lucent, and Octel Communications. He holds a Bachelor of Science degree in statistics and computer science from San Jose State University and a Master of Science degree in mathematics from the University of Connecticut.

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