CBA invests in fintech Paypa Plane to boost SME payments offering

The Commonwealth Bank of Australia (CBA) has taken a 20% stake in Aussie fintech Paypa Plane, in a bid to improve payment experiences for its small business customers.

And as more banks and corporates invest in startups to boost their SME offerings, we’re on the cusp of a huge opportunity for a burgeoning tech ecosystem.

Speaking to SmartCompany, Paypa Plane co-founder and chief executive Simone Joyce — who is also chair of FinTech Australia — says the partnership creates an “almost instant velocity network throughout the payments ecosystem in Australia”.

CBA will help small business customers transition to Paypa Plane’s PayTo product, which allows them to offer customers more choices and more control over how they pay.

But more broadly, the investment is indicative of the strength of the Aussie fintech ecosystem in Australia. There are some “really exciting and robust” businesses in the market, Joyce adds.

It’s significant that the banks and other corporates are recognising the value those fintechs can bring, in order to provide better services to their customers — specifically small business customers.

PayTo, for example, is designed to help businesses that rely on paper-based and manual processes to access more digital services from their bank account, Joyce explains.

That means CBA can now offer cost savings and better experiences, thereby better serving a customer base that has perhaps been underserved in the past.

Corporates making small business investments

CBA is not the only big business making investments in startups to support its small business offerings.

Just last week, MYOB announced the acquisition of two startups to bolster its SME management platform.

It acquired cloud-based document management software startup Nimbus in a bid to meet increasing demand for cloud products that allow teams to collaborate in a distributed work environment.

On the same day, MYOB announced it has also acquired Tall Emu, a business operations management platform allowing businesses to track multiple sales flows — including marketing and lead management, online payments and backorder handling, for example.

MYOB’s general manager for SMEs Emma Fawcett tells SmartCompany that both the Nimbus and Tall Emu teams are highly specialised in their fields.

Acquiring the businesses, rather than building something in-house, allows MYOB to “hit the ground running right away”, she explains.

MYOB’s general manager for SMEs Emma Fawcett. Source: supplied.

Last year, MYOB also partnered with fintechs Butn and Valiant, to offer customers access to invoice financing and predictive financing solutions, respectively.

Such fintech solutions are more applicable to small businesses than they were a few years ago, Fawcett says.

According to the most recent MYOB Business monitor, 72% of SMEs say traditional methods of financing take too long, and 82% said when they need funding, they need it right away.

“Fast access to cash smoothing has become critical to recovery and growth for SMEs.”

With change comes startup opportunity

For Joyce, corporate interest in fintechs, in particular, shows the sector has matured, blossoming into a “full blown industry” in itself.

“With that maturing comes a great cross-section of opportunities and partnerships, servicing all the different niches throughout that industry,” she says.

The fintech sector has been a buzzy and growing one for some time, but the need for digital payments solutions among small businesses was — as in so many industries — accelerated by the COVID-19 pandemic.

At the same time, we’re seeing what Joyce calls “once-in-a-lifetime changes” in financial services, infrastructure and regulation.

Digital adoption was on the way anyway, she notes. The pandemic simply forced a change of behaviour sooner, among consumers and businesses alike.

All of this adds up to an exciting future for both fintechs and other startups supporting small businesses, Joyce says.

“It is, I think, the beginning of what will be a very exciting few years in Australia.”