DALLAS, TX / ACCESSWIRE / April 3, 2019 / The most immediate relationship the average person has with fintech comes in the form of digital payment services. Apps like PayPal, Venmo, and Zelle have made it easier than ever to send money to friends and coworkers for things as small as food, drinks, or concert tickets. Cash is a relic of the past.
Regardless of such convenience, there is much to be improved in the digital transaction space. Processing and security fees applied on a percentage basis prevent the widespread adoption of such digital services. Additionally, paper checks continue to be used by individuals, businesses, and even the government. The Federal Reserve Bank estimates that it processes 15.2 billion paper checks per year.
Checkbook Inc. today announced the launch of Instant Pay. Businesses can push money instantly into millions of individual and business bank accounts without collecting sensitive routing or account information. There is no need for recipients to sign up for any service or download any app.
With over 19 billion checks for over $30 trillion sent in 2013, B2B checks cost businesses $25 billion a year. Yet conducting the money transfers over the traditional banking backend costs Checkbook merely pennies each time. It’s one of those classic startup businesses where you just wouldn’t expect that tech could cut prices so low.
The business model works a bit like Dropbox in the sense that Checkbook gives away its service to consumers in hopes of infiltrating businesses that it will charge. Rather than try to sell Checkbook’s convenience to companies one at a time, it hopes to gain viral traction and parlay that into real customers. That opportunity attracted a seed round from Boost.vc, Rocketship.vc, AngelList’s founders, and a slew of angels including Tim Draper.
Until now, most bank to bank transactions in the United States take 3 to 5 business days since funds traditionally travel along the ACH infrastructure, which is 40+ years old. ACH transactions require recipient on-boarding as a prerequisite, which is a huge barrier, especially for new or one-time payments. Today, vendors, suppliers and consumers desire that funds will hit their bank accounts faster and effortlessly. Checkbook has innovated the instant payment solution with these factors in mind. The company enables this faster payment method across a number of industries with a variety of payor and payee entities using VISA Direct rails.
One such partner is Yooz, which provides a seamless Accounts Payable automation solution for SMEs.
Laurent Charpentier, Chief Operations Officer, explains their business places tremendous value on getting their customers’ vendor invoices paid as quickly as possible. “Our customers are looking for the easiest and most automated way to process, approve and pay their vendor invoices without losing visibility and control. The cycle time from capture to payment is really important to avoid late payment fees, but even more important to negotiate early payment discounts and generate value out of the AP process. While traditional ACH solves some of the paper issues compared to traditional checks, Checkbook now provides great additional value with InstantPay, a solution for our customers and their vendors to operate even faster.”
SOURCE: SV Advisory Group