FinTechs put their foot down on trucking payments
If the $790 billion trucking industry was a country, it would belong to the G20. Add the last mile delivery industry, and it would be in the G10.
And yet, it lacks basic digitalization innovations taken for granted in key digitalized payments sectors such as technology. Truckers lack a cost-effective and efficient way to pay for fuel and other necessities on the road and have to wait for paychecks in the mail every two weeks, and too many find themselves dependent on loans on salary.
Efficiency, speed and efficiency of payments emerged as one of the top three driver retention issues – a top priority for the industry.
A-B plans to change all that, aiming to be the first FinTech payment platform to modernize the trucking industry’s broken financial system.
“We’re building the equivalent of Stripe or Square for transportation,” Vignan VelivelaCEO and co-founder of AtoB, said Karen Webster of PYMNTS in an interview.
The two-year-old startup recently announced that it has raised $155 million in Series B funding to do just that. Its top-notch list of individual and institutional backers includes industry stalwarts Eric Schmidt, former CEO of Google and executive chairman of Alphabet; TIME Ventures by Marc Benioff; Founder of AngelList, Naval Ravikant; DoorDash founders Tony Xu and Stanley Tang; Coinbase founder Brian Armstrong; Instacart CEO Fiji Simo; Jack and Max Altman of Altman Capital; and Long Journey Ventures, according to a Release.
Also read: Shippers and carriers are losing paper to integrated payments and automated documents
Tackle the Fuel First
The company’s vision is to create a payment platform for carriers and drivers who deliver for them by providing financial services from A to Z.
“AtoB’s payment platform provides a revolutionary suite of products for the fleet community for the first time, including no-fee fleet cards; instant pay by direct deposit; and access to bank accounts and savings tools,” Velivela said.
The initial focus will be on fuel broadly, the highest cost in the industry. The platform allows drivers to pay for carrier-approved fossil fuels, while being scalable to pay for eCharging stations and other green fuel sources that may emerge as the industry goes green.
The platform’s payroll system uses debit card rails to transmit payments for services provided over a mile or other cost unit on what it claims is an instant basis – in practice, at the same hour or the same day – every day.
Importantly, drivers do not have to switch bank accounts to use the platform.
Potential for expansion includes providing driver services such as insurance and working capital.
Essentially, AtoB almost creates a neobank to serve the constituency of drivers. Applications transcend trucking to encompass any commercial driver who needs to refuel a company vehicle. The platform can serve independent contractors as well as full-time employees.
Big Tech for Small Business
The platform brings great technology platform capabilities to what is still a cottage industry. According to the company, most of these companies are small: 92% of all trucking companies operate six trucks or fewer; 97% operate less than 20 trucks.
And in this trucking industry, drivers and carriers have to wait to get paid, it all depends on the verification of the delivery. AtoB aspires to speed up this process by using system data to track the progress of drivers along their route.
“AtoB strives to improve the lives of operators and drivers who power the global economy,” Velivela said. “For too long they have been left behind, without the basic financial services that most businesses take for granted.”
Also Read: Inflation Worries Truck Loading As Freight Demand Slows