Visa's latest fuel to the B2B payments innovation fire came in the form of its inaugural Small Business Hackathon earlier this year. Its winner was Hermyz, a company set on using technology to guide small businesses away from paper checks and toward digitization.
As the winner of a $10,000 grand prize and the support of a major payments technology company, Hermyz joins a growing community of disruptors and innovators addressing a multitude of problems in corporate payments and financial management today.
Christopher Phillips started the company after hearing of invoice management challenges by his mother, a small business owner. They communicated easily through Slack, the company told PYMNTS, so he had the idea of using the messaging platform to facilitate invoice management.
Phillips, along with the rest of the Hermyz team – Mike Nabil, David Guras, Zach Bauer and Mohamed Elkarim – told PYMNTS about how Slack and bot technology served as the inspiration for its solution that impressed Visa, the challenge of accelerating supplier payments while maintaining security and what's next for the team and its offering.
What is the point of friction you wanted to address? How have other solutions on the market today fallen short to address this issue?
We understand that small business owners want to spend their time running their businesses and generating revenue, rather than keeping their books and tracking payments. So, we wanted to make the process of tracking and paying invoices as easy as possible.
When we did our initial research and found out that there are six million people who use Slack daily, we decided to go to business owners where they are. There are a couple of payment tools on Slack, but they aren’t customized for small business owners. So we decided to build a bot that enables business owners to track and pay their invoices with very simple Slack commands. The emphasis here is on building the process into where our customers work.
Small business owners are already using multiple platforms to accomplish their goals. Our theory is that reducing that number by consolidating collaboration with payments will help reduce friction and increase productivity.
Why are small businesses still stuck on using paper checks to pay suppliers? What factors are changing/will change business payment habits in the U.S.?
Finance and payments are very serious about consequential processes for any business. It’s not a matter of businesses being “stuck” on paper checks, it’s just a practice that has been allowed to exist because of the traditional security and comfort that those involved feel when engaging in the accounting and payment process. With paperless accounting/transactions becoming more and more ubiquitous within our personal lives thanks to new technology on our phones, our hope is that these practices “bubble up” into changing the ways that businesses think about making their own payments.
Small businesses want to find every angle possible to compete with large companies. Businesses need to keep their accounts accurate to make sure they are maximizing their profits and are filing the right tax papers. It’s also very essential for small businesses to pay their invoices on time. Losing a key supplier is an extremely high cost for any small business, and any late payment fees can turn a winning quarter into a strategic misstep. By enabling faster access to the facets that make up this process, we’re hoping we can give the necessary tools to small businesses to keep up with the increasing pace of change in their respective domains, so they can focus on the things that make them want to come to work each day.
What are some of the challenges that come with relying on checks to pay invoices?
A check, being a physical object, is vulnerable to all sorts of dangers, ranging from human error during the filling/filing stage, to theft and forgery. Managing checks is a formidable task on its own apart from accounting, therefore electronic solutions that streamline this task will be highly beneficial and time-saving. It’s utterly important to let small businesses focus on the quality of their products rather than mundane tasks. It’s also very important to create easy-to-use solutions with flat learning curves that let users take advantage of them straightaway, without delays.
As payments accelerate, interest in faster and real-time payments for B2B transactions is limited. What are your predictions for the impact of faster payments on supplier payments?
B2B transactions are more complex in nature and require more precautions for parties involved. Businesses operate under the strict guidelines of contracts, thus they want to be sure that their financial resources are protected. Transparency, accounting and security are all key components to making the entire operation acceptable from a business’ perspective. That said, we believe that faster payments will help downstream supplier accounts for faster revenue, which will then give them more breathing room during a month or quarter to help deliver high-quality services back to their client. The less your supplier has to worry about what time/how fast you pay them, the quicker they can turn around and bring more value to a company.
What are some of the details behind Hermyz’s “bot” technology? What exactly is this technology, and how is it the best fit to solve the problems you’re solving?
The Hermyz “bot” is an application that accepts/translates requests from the Slack “client." The user interface is built with the Slack API and enables us to create Slack commands, which interact with our custom application API. The backend is built with Node, Express and Golang, and uses MongoDB for data persistence. The backend will receive an API call from the Slack bot, look up the invoice you wish to pay within our own data model and then manage the funding transaction via the Visa Direct API. When a response is received from Visa, the response is saved in the Hermyz database, marking the invoice as paid. We deployed the server as a container on the Google Cloud Platform's Kubernetes engine. Using GCP gave us the ability to set up a domain, employ a reverse proxy, use Let’s Encrypt to get SSL encryption working on both our entry point as well as our individual containers, and make sure that we were on the way to following best practices when it comes to securing transaction/financial data.
What’s next for Hermyz?
We are working on making Hermyz as practical as possible. We realized that many small business owners use Google Sheets to keep track of their invoices. We don’t want business owners to manually input their invoices to Hermyz. So, we are going to connect Hermyz with Google Sheets API to allow Hermyz to pull the invoices automatically from Google Sheets.
Once we get this done, we are going to add some filtering functionalities to Hermyz. As small business owners use Hermyz for an extended period of time, they might have hundreds, or maybe thousands, of tracked invoices. We'll make it possible for small business owners to filter their invoices by specific criteria, such as invoice date, vendor, payment status, due date or balance due.