Exclusive Q&A with Traxpay CMO & SVP of Product Management, David Descharnais
Traxpay uses data and logic to facilitate real time payments for the enterprise business. We speak with David Desharnais, Chief Marketing Officer and Senior Vice President, Product Management, about what makes their proposition unique as opposed to other B2B options, gaining traction with investors, and creating data-enhanced payments from the ground up.
Kevin Xu: Let’s start with an introduction on Traxpay. What’s the big idea behind it?
David Desharnais: Traxpay has been around since 2009, and in the beginning the founders, they set out to address what was a giant gap in payments and specifically, B2B payments. The fact that it’s a very slow process that goes through a banking network, that is difficult for the buyers and the suppliers in the transaction. To say where their money is, when it will come through, if they’ll receive the right amount. It came down to some simple things like – What about a real time capability? So the founders, the first thing they wanted to put together was the ability to initiate, manage and clear and settle large dollar-value transactions in real time, and so to do that, they needed some key technology components like a core banking system, and related licensing, and ability to interact with different payment rails that existed in the market like ACH rails or Swift rails or RTGS or wires and international transfers and all that kind of stuff. And to do that in a way that was very transparent.
What is critical to the success of Traxpay as a payments company?
Data is paramount. It can be something simple like an invoice, or a purchase order, or a bank statement, but it extends into many different things, it goes on and on and on and on. But when it comes to the payments, it goes to a bank or, it goes to a credit card, which is great, or it goes through some other form like a PayPal or something like that, that it is not equipped to handle data. So if something happens on the payment side, like a payment or a split payment or a milestone payment, or the buyer decided that – you know what I’m not going to pay you the full amount, I’ve decided to cut 20% off because your services weren’t what I expected… the banks can’t fix it. They’re just completely different rails that do no communicate. So that’s the problem that the founders set out to address to have real time, transparent money maintenance, large dollar transaction value, coupled with and connected to the data. It isn’t just structured data, the unstructured data that would always be tied to the money move and or a change in the business requirement or change in the amount or what have you. The data is always there at your fingertips, always there, always ready, always available with full transparency. And then the last thing I would say, you’re going to need to connect into existing infrastructures, that are in a corporate side or in a B2B marketplace side or network. And so this kind of a system, doesn’t exist today. I mean it exists with Traxpay but it doesn’t exist in what is traditionally called ‘static payment’. In static payments are when… it works if nothing changes, like if the ‘who’ doesn’t change, or the ‘what’ doesn’t change or the ‘when’ doesn’t change or the ‘why’ doesn’t change or the ‘where’ doesn’t change and the ‘how’ doesn’t change. They’re still slow, they’re still hard to track, there’s still no faith upon it, but it works. different. So that’s our business, one of the big things that we’re working on.
Traxpay seems like a kind of global payment network tailored for B2B payments. It’s something that should have probably been built; it just didn’t exist till you guys came to market.
Yeah that’s interesting way to look at it, I can’t disagree.
What are some of the uses for this data on the enterprise side, and what kind of feedback are you getting from businesses?
I’ll give you an example. Panjiva. There are ten million buyers and suppliers on this network today. And so what we’ve been able to do is we’ve been able to aid transactions to happen dynamically, enabled an attachment of data to the data exchange, attached that data to the transaction, and be able to facilitate the payment that matched the need of the buyer, and the supplier. In order for them to build a good customer relationship, the transaction and all that kind of stuff, enable milestone payments, and partial payments in real time. This could not happen in a bank, this could not happen over a credit card, but it can happen over Traxpay.
So how difficult was it to actually build up a global payment network, especially for large-scale enterprises?
It took about three years, so we started the company in late 2009, and we… I wasn’t there [laughs] the company seniors… It took about three years to build. We did this in conjunction with Accenture and we did this in Europe. And so we built the banking and financial institutions networks and payment systems in Europe, to cover the Euro zone. And where we operate today, to be clear, is we operate in the Euro zone and we can send money to anywhere in the world.
Traxpay has had success in gaining funding and attention from investors. What’s your pitch?
One of the things that would give you a sense of gravity is that the core banking system is stagnant. They know that when a payment comes in, payment goes out, money comes in, money goes out. Banks like JP Morgan and Bank of America, Deutsche Bank and Commerce Bank, Bank of China, every bank, from the world’s credit cards, to the biggest banks of the world. They all operate on a core banking system and they’re all different by the way. They’re all different. But these core-banking systems are literally 100, 200, 300 million lines of code, with over 20 to 30 years of history. I call it Frankenstein. In a stitched together manner, very fragile. So when you see the system at Bank of Scotland go down, two or three weeks where their systems were down, and they had to try to find a way to get them fixed. So that fact that we have our own core banking system built on modern architecture, is a fundamental shift in how we can interact and operate in the financial community. You’re fast; you’re nimble, modular. So that took years to build, frankly, years to build. B2B partnerships like Accenture. And that’s really what’s captured the imagination of our recent funders and one of the biggest banks in Europe and the biggest credit card companies in the world. And it makes them go… “Holy Moly.”
David Desharnais, Chief Marketing Officer and Senior Vice President, Product Management
For more than 20 years Mr. Desharnais has helped build and market some of the world’s most successful enterprise software and hardware products. Most recently, David led product management and marketing for Cadence Design Systems, where he helped double portfolio revenues during his tenure to more than $1 billion in annual sales. Prior to Cadence, David held a variety of design engineering positions at Lattice Semiconductor, Pixelworks, and Sharp Microelectronics, and served on the executive board of Sequent Learning Networks. David holds a Bachelor of Science in Electrical Engineering, and a Master of Business Administration and Finance from the University of Washington.