Fragmented Markets Drive Demand for Streamlined Spend Management Solutions

For businesses both large and small, the finance department has to juggle between disconnected tools to reconcile payments with expenses, often spending hours sorting through supplier’s invoices, subscriptions for business tools and general expenses just to close the books at the end of the month.

To simplify these processes and remove the friction in corporate spend management, Bulgaria-based business-to-business (B2B) payments firm Payhawk has created an all-in-one financial management platform for small- to medium-sized enterprises (SMEs) and high-growth multinationals in Europe, where fragmented markets tend to complicate these issues even further.

“We are combining not only current company payments, but also payments for accounts payable and reimbursing employees that don’t have access to company cards. All the company spend can go to one single system across the [business] — that’s the unique thing we bring to the market,” Hristo Borisov, the company’s co-founder and CEO, told PYMNTS in a recent interview.

See also: Simplified Spend Management Promises to Drive Faster Growth for Digital Natives

In addition to helping manage these complex workflows and providing multi-entity management tools for businesses in the region, the FinTech recently launched a cross-country credit card offering. This gives multinational businesses in 30+ countries the opportunity to use a single credit card provider in multiple markets — an option that Borisov said was not available to companies before.

Since its launch in 2018, the pan-European payments and expense platform has grown significantly, recently becoming Bulgaria’s first unicorn after completing a $250 million Series B funding round earlier this year.

Read more: Payhawk Becomes Bulgaria’s First Unicorn After $100M Round

It’s a feat that Daniel Tomov, founding partner at Eleven Ventures — the first institutional investor in Payhawk — attributed to the company’s unique talent and leadership, whose achievements have given a huge boost to the local startup ecosystem.

Robust Cross-Border Payment Solution

Providing a smooth and integrated cross-border payment solution for clients is a key goal for Payhawk, which currently provides its customers with faster payments in pounds sterling, SEPA for euro payments or Visa for Bulgarian lev.

To further remove the friction for businesses making cross-border payments, the firm is planning to launch a solution this year that will enable cross-border payments to reimburse employees or pay suppliers in euros or pounds sterling — one of the most requested features, Borisov said.

Related: B2B Spend Management Startup Payhawk Closes $112M Series B

“What we are solving for businesses is offering a single source of proof and a single system in which they can make all those payments [efficiently],” he further explained. “We are working on making those highly effective cross-border payments a reality for our customers so that they can actually use Payhawk for absolutely all the spend that they have as a company.”

While several currencies, such as the euro and the U.S. dollar, are more prevalent in the global financial system, businesses now have suppliers that are outside of the European Union, indicating the need to factor in other currencies.

“If you’re working with a supplier from the U.S. and you’re based in Europe or working for a supplier that’s based in Asia, you need to be able to work with those suppliers so that they don’t have to deal with company card payments all the time,” he said. “This is where we are looking into building a solution that is very robust, so that there are actually no borders when using a system like Payhawk.”

See also: Payhawk Launches New Enterprise Suite, Cash Back

SMEs Drive Growth

Unlike a few years ago, when using a company other than a firm’s bank to manage payments was uncommon, having a FinTech manage spending is more widespread within the business space today, particularly in the B2B market.

“We are starting to see a lot more digital CFOs and digital-first people consider these kinds of options that are beyond a [normal] bank to help them be a lot more efficient when managing payments and when managing corporate cards for bill payments. This is something that we see as a big trend,” Borisov said.

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That trend, he added, is fueled by growing demand from SMBs in the B2B market that need solutions to address pain points associated with their current spend management practices.

“I think we are very close to this pivotal moment, [and] by the end of this year or early next year, we are going to start seeing massive demand from SMEs in that space. This is where we see much bigger pain points needing solutions like Payhawk,” he said.

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