Familiar with the headaches of ironing out crumpled receipts, submitting expense reports and often waiting weeks to get reimbursed? You’re not alone.
It’s fair to say the practice around company cards and expenses is a mess right now, as anyone who’s been asked to pay for something on company time and claim it back later can attest. Danish payments startup Pleo wants to make that a thing of the past with a smart company payments card and software platform that takes care of all the fiddly admin and gives employees greater freedom while employers have more control over spending.
Its founders both formerly worked at Copenhagen-founded B2B payments firm Tradeshift, one of the Nordics’ most successful financial technology exports that is now headquartered in Silicon Valley. Jeppe Rindom, Pleo CEO and former CFO at Tradeshift, says his experience managing internal finance, running company cards and chasing expense claims means he has first-hand knowledge of the issues Pleo wants to solve. Speaking to PaymentEye at Money20/20 in Copenhagen last week, Rindom said that while it’s easier than ever for companies to buy things online, the payments process hasn’t kept up.
“In the past 10 years most of the things you need to run a business is a few clicks away, from subscriptions to travel, but if you look at card solutions they have not changed to accommodate new ways of buying,” says Rindom. While he represents the user perspective, his co-founder Niccolo Perra was also involved in the development of Mobile Pay, Danske Bank’s massively popular mobile payments app.
What’s the status quo?
So what’s happening right now? For an employer, getting the paperwork is very cumbersome and it takes six weeks to get a card, says Rindom. Meanwhile there’s not a lot of control over what employees are spending on and the statements are not very transparent with card sharing widely practised. Cards are often limited to execs, which Rindom says does not match a more decentralised pattern favoured in businesses today. Meanwhile, on the employee side the service takes care of all the admin of filing expensives such as collecting receipts, tagging project numbers and passing them on to accounts.
With Pleo, it takes ten minutes to onboard a new card customer, which gets them a virtual MasterCard and if they need a plastic card it arrives a week later with no paperwork. It’s effectively a prepaid card, with employees able to set the limit and control what kind of things can be bought with it and works like a debit card.
Like many of its startup peers in the Nordics, the young company has its eyes on international expansion and already has a base in London. Just 13 months old, Pleo’s beta was launched at Money 20/20 and the full launch is planned for June with UK roll our scheduled for a couple months later.
Commenting on the decision to stay headquartered in Denmark, Rindom says: “We both have Danish roots and you could say it would have been a decision not to start here.” He touts the vibrancy of the local startup scene, at the heart of which lies grassroots community organisation #CPHFTW, and while there “isn’t the biggest pool” of talent they’ve found it relatively easy to recruit an international team. Pleo came out of Founders, also based in the city, which is a startup studio comparable with Finleap in Germany or Betaworks in the US, driving the creation and execution of new business ideas in the region.
Asked what he makes of the European fintech space right now, he says it’s still early. “The hype is way ahead of where companies actually are but that reflects the threat they represent and banks are realising that fast. A year and a half ago, ‘fintech’ was not even known in Denmark. Today on daily basis the main biz paper talks about disruption and fintech – but that’s happening faster than the development of the businesses themselves.”
“It’s amazing how many new companies are popping up but will take while. It’s not like consumer software. There’s a reason why you still run paper processes in businesses when it disappeared ages ago for consumers. The same will happen in payments.”
Zeroing in on the Nordics specifically, he says momentum around financial tech is growing along the same lines of the wider startup scene there – a lot has happened in the last five or six years.
“When I came out of business school 12 years ago great students were are all about working in investment banks and grad programmes: entrepreneurship or startups were not mentioned. If you ask business students today there’s a mindset and culture change. People want to create stuff and that has happened fast.
“Fintech is in a space on its own in way though as it’s difficult to create something straight out of school. To be successful you need to navigate of building great software, knowing your needs in our case payments and infra behind and then compliance. If cannot navigate those you are not successful.”
What does he think would help boost the local scene? Things like tax credits that have been successful in the UK to stimulate capital from angels and push the idea of investment to the public.
New data from Worldpay, which surveyed 4,000 shoppers in Europe, shows the continent is becoming more tech-savvy and a keen adopter of new payment technology.
Berlin neo bank N26 talks new products, UK launch and the advantages of being based in Berlin.
Just under twenty percent of all card purchases are now being made on contactless cards, according to new data from the UK Cards Association.
In this guest blog, Apriva's SVP, Stacey Tappin, talks about the evolving payment interactions and the increasing importance of providing a cohesive consumer experience across all channels.