LFP191 – Serving Microbusinesses Payment Needs with Fintech w/Ravi Jakhodia CEO Coupay

Serving the sole trader or microcompany is super-important right now as economies and indeed societies continue to try and build themselves back from the ground up after widespread government actions in 2019 which massively favoured MegaCo and governments never-ending pork-barreling monetary printing presses at the expense of the little guy. In this context we define microbusiness as those firms with less than 5 staff or £150k turnover.

Coupay offer a simple way for customers to pay microSMEs faster and easier and supply surround to that basic offering to keep the SME’s admin running smoothly. As such CEO and co-founder Ravi Jakhodia  has spent some time considering the needs of this segment and the issues they have,

In LFP179 we heard from  Jay Bregman joined us to discuss how tech innovations in insuring the small business can help the little guy or gal, the microbusiness get cover they wouldn’t easily be able to otherwise get and hence compete for business which otherwise they could not.

In this episode we hear how a similar mentality applied to payments can empower the microbusiness which would otherwise suffer disproportionate costs.

Topics discussed include:

  • comparative weather studies – Lucknow vs London
  • Uttar Pradesh’s amazingly successful virtual elimination of Covid via early treatment – unsurprisingly unheralded in “western” media (even as the earlier in the year hyped “near-catastrophe in India” was a cause celebre); o tempora o mores
  • Lucknow is famed for its kebabs
  • monsoons and the pleasure therein
  • why Ravi decided to move to London
  • Ravi’s career journey through consumer goods and worldwide launching of brands and successful founding and exiting his prior startup in connected vehicles
  • collecting late payments pre-internet age in Calcutta as an introduction to small business challenges
  • contactless is super-effective and efficient yet other payments can be complicated and expensive
  • systems not designed for the needs of a microbusiness – the gap here being to treat them with a modern digital interface/charges
  • multi-channel selling and the needs that leads to
  • open banking as the key to unlock the challenge
  • easing reconciliations
  • “microbusinesses get the raw end of the deal”
  • payment costs can be as much as 3% of sales
  • open-banking can cost ~1/10th-1/30th of the current level of payments
  • coupay charge 20p per transaction
  • no middle man in open banking payments hence cheaper and more secure
  • “in the past most of the digital solutions were designed for the medium business and then pushed down to the small businesses”
  • but this is pushing from one domain of needs to another and a poor match
  • 1 in 4 or 5 now have a side-hustle
  • newer Fintechs – lego blocks or tapestry?
  • the advantage of coming from outside the payments vertical in being consumer-centric
  • easier ways of sending “requests to pay” – WhatsApp, text, email
  • smart invoices, QR codes and pay buttons
  • “the customer can pay in 4-clicks and that’s our promise to the microbusiness”
  • “70-80% of payments through Coupay are made within 24hrs of sending the request”
  • other possible extensions to the core feature and weaving them all together
  • Coupay’s journey starting just before Covid, launched their proposition in Feb21 and by now have already done £2m of payments in the UK
  • Coupay are doing a £1.5m Seed Raise
  • how does one get millions of customers in this sector?
  • no gate keepers in microbusinesses compared to even SMEs let alone BigCos
  • comparative businesses that have grown fast in this segment

And much much more 🙂

Share and enjoy!