We Are The First Fintech Investment Of JP Morgan In APAC: Mohan Krishnan, Founder, Global PayEX (2024)

Global PayEX offers an AI-driven working capital optimisation product suite via Accounts Receivable and Accounts Payable automation. Founded in 2011, the firm’s solutions are aimed at increasing productivity, lower cost, accelerate revenue, enhance transparency and predictability across AR and AP cycles to benefit corporates, customers, suppliers, banks, and FIs.

Analytics India Magazine got in touch with Mohan Krishnan, founder, Global PayEX, to get insights into how AI is driving the fintech solutions for customers at Global PayEX.

“Our customers include several F500 and large corporates such as 3M, Bridgestone, Huhtamaki, GSK, Stanley Black and Decker, Continental, and Ebro. We are the first fintech investment of JP Morgan in APAC, and we have strong partnerships in place with several leading global and regional banks,” said Mohan.

AIM: What are the key services you offer, and how do they stand out?

Mohan: We provide key automation solutions on both the Account Receivables (AR) and Account Payables (AP) sides.

• On the Account Receivables side, FreePay: The Electronic Invoicing Presentment and Payment (EIPP) with straight-through reconciliation. FreePay delivers actionable invoices in real-time on mobile or desktop and enables payment in time which helps in accelerated collections, reduction in DSO, reduction in disputes/billing adjustments and reconciliation errors.
• AlgoriQ: An AI-powered intelligent fund application (IFA) solution for end-to-end automation of AR reconciliation. AlgoriQ auto-reads payment advice and bank receipt reports (MT940 etc.) in various formats and does multi-point data match of invoices for straight-through reconciliation in the ERP. The product also brings in sophisticated Deduction management with aggregation, limit checks, and dispute resolution to minimise unauthorised deductions.
• FinEX: Financing platform for AR and AP extends working capital finance for both the channels and the vendors from a variety of lending partners.

AIM: How does AI/ML power your ALGORIQ engine?

Mohan: AlgoriQ automates multi-way reconciliation using AI/ML for our customer’s modern trade, or e-commerce, or institutional clients. The ML engine extracts the content and context of data from multiple formats of scanned data and direct downloads. Rules-based validations and enhancements are performed on data as the machine builds related lexicons at the customer and domain process levels. The machine-learning algorithm then performs intelligent record matches based on the context extracted and rules defined. Full matches are reconciled, and partial matches follow learning workflows. In addition, AlqoriQ now supports extensive deduction management.

AIM: What’s your take on the increasing use of data analytics in improving working capital management?

Mohan: One of the key indicators of the financial health of an organisation is its working capital management. Every CFO we meet has a clear agenda to improve its Account Receivable and Accounts Payable processes to release cash strapped in their operations. Digitalisation and automation of processes are great steps in reducing working capital. However, any measure implemented needs to be continuously monitored to make it effective. Data analytics thus becomes a key to have those proper insights into the challenges in the current as-is processes and the constant improvements happening due to the automation measures.

For example, tracking Day Sales Outstanding (DSO) is an effective way of understanding the reasons for a higher DSO like collections, credit terms, payment mechanisms, or disputes, and how effective the process change or automation is in helping to reduce the DSO. In addition, PayEX provides working capital analytics for Corporates, with DSO tracking, cash forecasting, buyer payment behaviour, etc., which helps in a better return on capital employed.

Our payment data and payment behaviour analytics is also aiding credit decisions by our panel of embedded Banks and NBFC lenders for both AR and AP financing.

AIM: How did the pandemic impact the fintech industry?

Mohan: The fintech industry has seen exponential growth amidst the pandemic. In the past year, both MSMEs and large corporates were forced to remotely manage their supply chains and cash flows. This led to a massive shift away from manual processes towards automation and cloud-based accounting for seamlessly managing Accounts Receivable and Payable functions, including collections, payments and reconciliations.

During this time, PayEX saw transaction volume surge drastically from INR 50 billion before COVID-19 to 100 billion with the number of dealer distributors on our platform swelling 4 times.

Further, the pandemic has served as the much-needed catalyst for the long-awaited digitisation of vendor payments and retreat of paper checks. Here, we have spotted a significant uptick in the adoption of electronic payment methods, such as NACH (pull payments) and NEFT/RTGS payments and a gradual move away from paper-based transactions like cash and cheques. Today, nearly 95% of the payments on our platform are processed through NACH and NEFT/RTGS, while a small percentage is through UPI, Cards and Open Banking initiatives.

AIM: Tell us about the challenges your clients face and how your team solves them (use cases)?

Mohan: A key challenge faced by most enterprises is the reconciliation of accounts payables and receivables. At present, most reconciliations are managed through traditional and manual solutions. However, as the scale of transaction volumes surges, businesses across industries, which have a wide network of local dealers to distribute their products across the country, are realising that manual solutions not only possess higher error rates but also add to the organisation’s operational risk. So, they are looking for an integrated and automated approach to reconciliation that can significantly reduce reconciliation time and operating costs and minimise regulatory penalties.

Our FreePay solution digitises invoice presentment for the dealers while automating their collections and reconciliation processes at the backend to allow immediate resolution of deductions, discrepancies, and disputes and the application of instant credit notes. FreePay also offers an instant view of data, including invoices, statements, payment status, credit notes, etc., via mobile apps (android, iOS) or the web. This has helped both corporates and their dealers/distributors, who are often MSMEs, reduce their DSO by half and unlock millions of dollars in working capital through quicker cash conversion.

We also offer comprehensive analytical dashboards with audit trails. This allows real-time computation and trend analysis on all key AR metrics such as DSOs, unapplied cash receipts, cash forecasting etc.

AIM: What’s next for Global PayEX?

Mohan: We expect to continue our 40-50% QoQ revenue and transaction growth trajectory. As of now, we have more than 50 large corporates and 15,000 MSMEs (dealer/distributors) on our platform, and we expect to grow this significantly besides enabling dealer/channel financing for this segment.

In parallel, we will also continue to retain and grow our customer base for our FreePay and AlgoriQ solutions and maintain our position as market leaders in AR automation and reconciliation. From an AP automation and Financing standpoint, we have closed the initial few deals, and we intend to build significant momentum in this space as well. Internationally, we have contracted deals and are targeting a multi-million-dollar revenue in the FY 2021-22.

AIM: What improvements would you like to see in terms of the policy & regulations to boost the fintech sector?

Mohan: The GOI has constantly been endeavouring to optimise the regulations and policies for the start-up sector as a whole and especially the fintech sector along with the central bank. However, challenges like a vast population still unbanked/semi-banked, the slow ramp-up of the internet infrastructure, limited smartphone usage in rural areas becomes a challenge for the adoption rates. Most of the fintech offerings and adoption are skewed towards large or mid-tier cities.

More incentives to Make in India smartphones, giving high-speed internet access to the rural areas, making cash transactions expensive, providing support to the SME segment for easier credit underwriting by lenders will help the fintech sector in a big way.

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