Singaporean payments startup shifts to business clients with $1m fundraise

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Photo credit: racorn / 123RF.

Singaporean startup iPaymy has raised US$1 million in a seed round led by Beenext and Digital Garage’s investment arm, DG Incubation.

Starting out as a consumer-focused platform, iPaymy has since pivoted towards serving small and medium-sized enterprises (SMEs), providing a platform for them to use their credit cards rather than cash to pay for expenses like invoices, salaries, and taxes.

The startup’s first product was a payments platform that allowed individuals to pay monthly expenses using their credit card.

It’s just like if you go to a restaurant and charge the meal to your credit card.

“We launched a consumer business to help consumers earn lots of air miles by paying their rent with their credit card,” iPaymy co-founder and CEO Ethan Dobson tells Tech in Asia. “Organically, after a few months, we started hearing feedback from some of those consumer customers who said they run a small business, and it would be great if they could use the same solution there.”

That’s when the startup began working on its new offering, named iPaymy for Business. This platform allows SMEs to add payees and make both one-time and recurring payments using a credit card – even to payees that don’t typically accept such payments.

More than air miles

Small businesses can struggle to access traditional financing products, such as bank loans, that they typically rely on to cover operating expenses. They might not meet the lender’s criteria, or they might have an unsatisfactory or non-existent credit record. Even if they have a decent credit score, they likely face a motherload of paperwork, the need to put up other assets as collateral, and a weeks-long approval process if they apply for a loan.

Something that most Singaporean SMEs do have access to, though, is a credit card. If they have the ability to pay everyday outgoings on credit card, they can free up working capital for spending or investing elsewhere.

The problem is that plenty of payees – in a broad sense, including employees and landlords – don’t accept credit cards. Realizing this, iPaymy co-founders Dobson and Chrystie Dao-Szabo set out to find a solution.

Within the rails

Explaining how the model works, Dobson says that he considers iPaymy to be a tech-driven payments platform, rather than a financial intermediary.  

“We don’t actually touch the cash, by design,” he explains. “We want to work within the existing rails, so we work with various acquisition partners – Stripe being one of them.”

Pivot, grow