Think of cash flow and small merchants, and one may think of, well, a bit of disconnect. Maybe a few headaches. Certainly not a straight line from sales made to money in the bank, nor a fast trip.
That’s because of the paper chase, the one where checks come in.
Or where merchants wait for card transactions to settle to get money into their bank accounts, which can take days.
Either way, it’s hurry up and wait.
A new partnership announced today (June 20) between Paysafe, instant money firm Ingo Money and Company.com is all about ending that wait by offering same-day settlement to U.S. small business merchants. The instant payments push will support efforts to give SMBs access to funds the same day they are paid, accelerating cash flow and expanding merchants' options to run their businesses absent those cash flow frictions.
At a high-level view, Paysafe has integrated into Ingo, tapping into Ingo’s push payments technology to bring same-day settlement and guaranteed funds to Paysafe merchant SMB coffers – today, that’s a base of 250,000 merchants. Existing Paysafe customers can activate same-day settlement through their current accounts via a contract amendment. Ingo Money’s network enables instant money payments to more than 4.5 billion different card and wallet accounts.
The payments will be enabled through Company.com, an Ingo-acquiring distribution partner and Paysafe’s platform technology partner that is assisting in the commercialization process, helping to define risk parameters and consulting on the integration and launch of the service. Paysafe is accessing Ingo Money through Company.com.
In an interview with Karen Webster, a trio of executives – Drew Edwards, CEO of Ingo Money; Todd Linden, CEO of Paysafe North America; and Bill Wade, CEO of Company.com – weighed in on this sea change for small merchants.
Opening New Cash Flow Doors
Readers of this space know that push payments move money across rails that are already extant, taking the card networks into reverse gear, so to speak, with monies moved in real time, 365 and 24/7.
For SMBs, the chance to have funds pushed into their accounts on the same day opens new cash flow doors. With instant payments, the waiting evaporates. The contractor who typically gets checks on Friday and hurries to deposit those checks before closing still must wait a few days to pay her workers. The credit card payment that settles a few days later has the same effect. Thus, the business owner must dip into working capital to float the business until then – perhaps even dipping into personal funds.
Push payments may have had their initial sweet spot with consumer use cases, but the landscape is changing.
The push payment environment was somewhat isolated to small merchants that were using mobile technology, said Linden. But when looking at services, there is a wide variety of even larger volume merchants who are in tight circumstances, and have often been using cash advance tools and alternative lending tools for funding.
For smaller players, say in the home improvement vertical, for example, instant funding means that companies are able to go out and buy parts or materials.
“This initiative disintermediates that whole process,” Wade said. “Same-day payment will become the standard across the industry, which merchants will require in the future.”
The firms are targeting a beta test in July and a full launch later in the year. And one customer signing on out of the gate, as noted by Wade, as Company.com has been in contract to provide services to Office Depot and Office Max. Office Depot will make the same-day funding available to its millions of small business customers. Think of it, said Wade, as stepping on the gas pedal for push payments.
Paysafe also plans to introduce bundled Company.com products and services as part of this offering later in the summer.
“It’s just about turning a credit card transaction into the same thing as a cash transaction … It levels the playing field and is a game changer,” stated Ingo’s Edwards.