Rapyd: Enabling the Next Frontier of Digital Payments
The modern global economy demands increasing levels of flexibility and adaptability — often beyond the current capabilities of financial services providers. A single purchase might involve a customer in France using an e-wallet to buy a product from a merchant in Brazil who accepts payments in real and, in turn, disburses funds to a supplier in Indonesia in rupiah. Rapyd has built a platform that makes it easier to execute transactions like this one, and in general, reduces friction associated with global payments.
Rapyd was founded in late 2015 by Arik Shtilman, a serial entrepreneur who bootstrapped his previous company, ITNAVIGATOR, and sold it to Avaya in 2013. Rapyd aggregates local payment providers into a global “network of networks” that allows merchants, on-demand gig platforms, and online financial services providers to digitally enable and scale common local payment methods around the world. Through a single API, Rapyd offers a unified set of fintech and payments capabilities, enabling its customers to accept alternative payment methods (e.g. cash, bank transfers, e-wallets, local debit, etc.) and perform both local cash collection and disbursement. Beyond this, Rapyd provides tokenized identity management and compliance solutions (KYC/AML), as well as software for e-wallet and FX management.
Today, we are excited to announce that, along with GC portfolio company and close partner Stripe, we’ve co-led a $40M Series B financing in Rapyd.
Our core thesis is that Rapyd is bridging the gap between robust economies and an increasingly important group of stakeholders in global commerce: the unbanked and the non-credit/debit card economy. This group represents over 2 billion people and ~72% of online payments today (local bank transfers, e-wallets, and cash). As global e-commerce merchants, sharing and gig economy marketplaces, banks, and telcos expand their global footprint, they face considerable challenges: making and receiving payments in hundreds of countries and currencies; navigating regulatory environments; supporting the locally preferred payment methods. The widespread prevalence of cash-based economies and payments, especially in emerging markets, plus the rise of alternative payment methods like e-wallets, instant payments, mPesa, UPI, iDEAL, etc., have created a huge challenge for global businesses as they scale. It is also expensive, impractical, and prohibitive from a regulatory perspective to connect directly to each and every end-point in local markets.
Enter Rapyd, a company that has spent the last few years building out a “network of networks” via integrations with local payment network partners around the world, including a heavy focus on emerging markets. To date, Rapyd has amassed a global network of 1.6 million cash collection endpoints (i.e. ATMs and convenience stores) and ~100 different e-wallets to power non-card-based payments in 65+ currencies in ~150+ countries.
By allowing customers to simply plug into its end-to-end global alternative payment menthods (APM) network instead of building it themselves, Rapyd provides access to billions of end-customers, as well as to a universe of contractors and suppliers that participate on global marketplaces. Rapyd powers a wide variety of use cases, including: enabling remittance companies and online lenders to payout money, allowing telcos to offer e-wallets and payment solutions or improve existing deployments, helping global marketplaces receive cash and APM payments as well as make payments to sellers or contractors, and enabling large banks to expand their product offering to their global business clients.
While credit and debit cards dominate both e-commerce purchases and point-of-sale (POS) more broadly in the United States (63% and 75%, respectively), this is not the case in the rest of the world. Much of our world runs on cash. Globally, there were $19 trillion of cash payments and $20 trillion of cash deposits made in 2016, while 31% of all global workers are paid only in cash. 31% of POS transactions and 52% of bills are paid via cash. In some regions (especially Asia), we have seen a massive rise in digital payments (bank transfer and e-wallet), where penetration has leapfrogged the Western world. There are 100+ e-wallet companies around the world, and 17% of e-commerce outside the U.S. is done via e-wallet payments. More than half of e-commerce transaction volume is made via e-wallet and other alternative payment methods.
Cash and alternative payment trends look quite different across regions. Asia is expected to see a huge shift from cash to e-wallets in the coming years, as e-wallets expand to 66% of regional e-commerce and 42% of POS transactions by 2022. Cash will remain prevalent in Latin America, continuing to represent 36% of POS transactions (down from 58% today). E-wallets and bank transfers will drive EMEA e-commerce, representing 24% and 20% of transactions by 2022, while cash at POS (which dominates markets like the UEA and Nigeria, at 70% and 97% of payments, respectively), will shift from 47% of total POS payments to a still-meaningful 30%.
Clearly, the opportunity to tap into international consumers who are using cash and APMs both online and at point-of-sale is large and growing fast. Rapyd is at the forefront of this trend and will no doubt help global players in commerce, transportation, banking, and telecom expand their footprint, access more customers, and improve their customer offerings.
Today, Rapyd joins our GC family of fintech investments including Stripe, Monzo, Gusto, Oscar, Fundbox, Cadre, and Hometap, and our growing EMEA portfolio of investments including Deliveroo, Shift Technology, Lemonade, and Contentful.
Adam Valkin, Addie Lerner, Matt Brennan and GC Team