Transforming Digital Payments and Expense Management

Since its inception in 2011, Zaggle Prepaid Ocean Services Ltd has rapidly evolved into a leading player in the spend management and embedded payment solutions space, now standing as a publicly listed company. Founded by the serial entrepreneur and visionary Mr Raj P Narayanam, the company initially focused on digital payment solutions, aimed at transforming how businesses manage expenses and rewards. Over the years, Zaggle’s offerings have expanded significantly, reflecting its commitment to innovation and meeting the dynamic needs of its clients.

When Wanda Rich, editor of Global Banking & Finance Review, interviewed Zaggle MD and CEO Avinash Godkhindi, he spoke about how in recent years, especially post its IPO in September 2023, Zaggle has made significant strides in strengthening its market position. “Zaggle’s listing on the stock exchange has further solidified our reputation, providing the company with the capital to fuel our ambitious growth plans,” he said. “We have reported consistent growth across 20quarters, driven by a robust product portfolio that includes expense management platforms, employee benefits solutions, and rewards programmes. Our latest numbers highlight a significant revenue uptick, highlighting our strong market demand and effective business strategies.

"We continue to deliver exceptional results, achieving another remarkable quarter with a topline of Rs. ₹ 3,025.6 Mn, an Adjusted EBITDA of Rs. 295.2 Mn, and a PAT of Rs. 185.6 Mn. This outstanding performance highlights the strength of our scale and ongoing reinvention, underpinned by the resilience and agility of our business model,” he continued.

“Looking ahead, we are upping our guidance to 50-55% growth in our topline for FY 25. We are very confident of doubling our FY24 revenues in the next two years. They also highlighted that Zoyer will be a key driver of future revenue growth and that the company is considering EBITDA-accretive inorganic growth opportunities.”

In addition, he revealed that Zaggle has been actively enhancing its technological capabilities, with a strong focus on artificial intelligence and machine learning to drive efficiency and innovation. “The recent analyst presentation emphasised Zaggle’s strategic initiatives, including the expansion of its platform capabilities, deeper penetration into the Enterprise segment, and plans to scale its operations internationally. These efforts have been well-received by the market, positioning Zaggle as a key player in the fintech landscape.

“Zaggle will continue to invest in R&D, aiming to introduce more cutting-edge solutions that cater to the evolving needs of businesses across industries,” he went on. “Looking ahead, Zaggle is focused on expanding its market share, both domestically and internationally, while continuing to deliver value to its stakeholders.”

One way in which it does this is through a number of key innovations that set it apart from its competitors. “As a leading player in spend management, Zaggle has a differentiated value proposition and diversified user base,” Avinash explained. “We have a diversified portfolio of SaaS & FinTech products, including Employee Flexi Benefits, Expense Management, Vendor Payments, Utility Bill Payment, etc. and a wide touchpoint reach. Zaggle is one of the largest issuers of prepaid cards in India in partnership with its banking partners, and we have issued more than 50 million prepaid cards and served more than 3.0 million users as of September 30, 2024.”

Zaggle’s network of corporate customers covers the banking and finance, technology, healthcare, manufacturing, FMCG, infrastructure and automobile industries, although its solutions, including Zoyer and Propel, are sector-agnostic. “Our spend management solution enables businesses to reduce time and effort spent on low-value add but business-growth-supporting and compliance-linked activities. It helps in the faster processing of expenses, optimises data management, provides spend analytics, filters fraudulent claims, avoids duplicate claims, and aids in procurement analytics and strategic sourcing, among others.”

An example of this solution is Zoyer, Zaggle’s integrated, data-driven business spend management/accounts payable platform. “With Zoyer, corporates can optionally get a corporate credit card with an additional working capital limit. With solutions on channel rewards, channel partners and employees get multiple options to redeem incentives and rewards.”

“There is also Propel, a corporate SaaS platform for rewards, incentives and recognition for channel partners and employees. With this product, corporates also get an additional credit period in some segments of payments.”

Zaggle’s spend management system has received accolades from industry analysts and customers alike for its usability, reliability and effectiveness. Avinash went into more detail on the impact it can have on businesses. “Our system can generate a 30% reduction in procurement cycle time through automation and streamlined workflows,” he said.

“Significant cost savings can be achieved through enhanced supplier negotiations and contract compliance. It scores at 70% accuracy in expense reporting and can produce a 90% reduction in processing times, leading to improved employee productivity and satisfaction. Plus, users have real-time visibility into spending activities, enabling proactive decision-making and cost-control measures.”

While contactless payment has been on the rise, Zaggle has been at the forefront of adapting to this growing demand, particularly in the realm of supplier invoicing and payments. “Recognising the shift towards digital and contactless transactions, Zaggle has enhanced its technology to facilitate seamless, secure, and efficient payment processes for businesses,” Avinash confirmed. “Our platforms now incorporate advanced features that support real-time payments and contactless transactions, which are essential for maintaining speed and accuracy in the supply chain.

“Our Zoyer platform, for example, has been specifically designed to cater to the evolving needs of businesses by offering a fully digital invoicing and payment solution. It integrates with existing ERP systems, allowing companies to transition smoothly from manual processes to automated, contactless payments. This not only reduces the time spent on processing payments but also minimises the risks associated with handling physical documents, thus enhancing overall efficiency and security.

“Zaggle’s spend management system has brought in innovation through its comprehensive feature set, user-friendly interface, seamless integration capabilities and proven track record of delivering tangible business value,” he added. “These expense management solutions are linked to ESG goals, providing tangible benefits in terms of environmental stewardship, cost savings, transparency, stakeholder engagement, risk management, employee satisfaction and competitive positioning.”

He went on to elaborate on the power of embedded payments, which are revolutionising how businesses manage their payables by integrating payment capabilities directly within business workflows. “Zaggle’s solutions are a prime example of this innovation,” he said. “Zoyer embeds payment functions directly into the spend management platform, allowing businesses to manage and execute payments without needing to switch between multiple systems. This integration streamlines the entire payment process, from invoice receipt to payment execution, thereby reducing errors, saving time and improving cash flow management.

“Zoyer also enables businesses to automate their payable workflows, ensuring that payments are processed on time and in accordance with negotiated terms,” he continued. “This not only enhances operational efficiency but also provides businesses with better control and visibility over their financial operations. By embedding payments into the core workflows, we help clients avoid delays, reduce manual intervention and, ultimately, improve their relationships with suppliers.”

He described the crucial role Zoyer plays in enhancing supplier relationships by ensuring that payments are made on time including utility bill payments via the newly introduced BBPS platform, which is critical for maintaining trust and fostering long-term partnerships. “The platform automates the payment process, reducing the chance of delays that can strain supplier relationships,” Avinash said. “By integrating with existing ERP systems, Zoyer provides real-time visibility into payment statuses, allowing businesses to manage their cash flow more effectively and ensure that suppliers are paid promptly.

“On-time payments, including utility bill payments facilitated by Zoyer, not only help businesses avoid late fees and penalties but also allow them to take advantage of early payment discounts offered by suppliers. This improves the financial health of both the buyer and the supplier, leading to stronger, more collaborative relationships. Furthermore, the transparency and reliability provided by Zoyer enhance trust, making it easier for businesses to negotiate better terms with their suppliers.”

Avinash also raised what he sees as one of the most significant challenges in vendor invoicing today: the reliance on manual processes, which, as he explained, are prone to errors, delays and fraud. “The lack of integration between invoicing systems and payment platforms can lead to inefficiencies such as duplicate payments and missed invoices. Additionally, managing compliance with diverse regulatory requirements across different regions can complicate the invoicing process.”

Fortunately, Zaggle’s Zoyer solution addresses these challenges by offering a fully integrated digital invoicing and payment platform that automates the entire process. “Zoyer eliminates manual entry errors by digitising and automating invoice processing, reducing the time spent on managing invoices and ensuring that payments are made accurately and on time. The platform also incorporates advanced compliance tools, ensuring that all transactions meet regulatory standards, thus mitigating the risks associated with non-compliance.”

Due to such risks, Zaggle’s compliance tools are vital to ensuring that all financial transactions meet the necessary regulatory requirements. “In a landscape where regulations are constantly evolving, especially in the financial sector, having robust compliance tools is essential for protecting businesses from legal and financial risks,” Avinash said.

“Zaggle’s platforms are equipped with features that help businesses navigate complex regulatory environments. These tools ensure that all payments and transactions adhere to local and international regulations, such as GST in India, data protection laws and anti-money laundering requirements. By automating compliance checks, Zaggle helps its clients avoid the potential penalties and reputational damage associated with regulatory breaches. Moreover, this focus on compliance builds trust with stakeholders and ensures that businesses can operate smoothly across different markets.”

In terms of future growth, Zaggle is strategically positioned to capitalise on India’s rapidly evolving digital finance sector. Avinash reported that following its successful IPO, Zaggle is focused on expanding its product offerings and deepening its market penetration. “One of the key areas of growth for Zaggle is the corporate segment, where there is significant demand for efficient spend management and payment solutions,” he said. “We want to enhance our existing platforms, like Zoyer, with more advanced features that cater to the specific needs of clients including real-time analytics, AI-driven insights and enhanced integration capabilities.

“Owing to our holistic and superior offerings, we have been able to sign over 620 new clients in the last 12 months. Zaggle’s clients now include marquee names such as Wipro, Bennett Coleman and Emcure Pharmaceuticals. Some of our prominent BFSI clients include SBI, ICICI Bank, Kotak Mahindra Bank and Axis Bank.”

In FY24 and Q4-FY24, Zaggle set a record in terms of revenue from SaaS fees, programme fees and Propel Points. This led to Zaggle’s highest-ever performance across key profitability metrics during these periods. Furthermore, Zaggle is exploring opportunities to expand its presence internationally, leveraging its experience in the Indian market to enter new geographies like North Americas.

“We also plan to invest in research and development to introduce cutting-edge technologies that will drive the next wave of innovation in digital payments and spend management,” Avinash added. “As India’s digital finance sector continues to grow, Zaggle aims to be at the forefront, providing solutions that not only meet the current needs of businesses but also anticipate future trends.”