The list of layoffs and Chapter 11 bankruptcies has now grown to include hallmark retailers including Forever 21, Pier 1, J Crew, Neiman Marcus, Stage Stores, Laura Ashley and Debenhams in the UK, and JCPenney late last week. It’s not a pretty picture despite some growth in e-commerce and online sales as companies scramble to adjust.
A growing wave of late payments is also impacting suppliers as small and midsize US businesses struggle to generate cash flow to survive during the coronavirus pandemic.
San Francisco-based Plastiq has launched a new credit card acceptance product earlier than scheduled to help SMBs get access to cashflow faster during the COVID-19 crisis. Originally planned for Q3, the product was fast-tracked and released early to help Plastiq small business customers until the economy rebounds.
“COVID-19 and the associated stay-at-home orders have caused a domino effect of late payments across the economy, with SMBs especially hard hit,” said Eliot Buchanan, CEO and co-founder of Plastiq.
“As cash reserves run dry, many SMBs have been unable to pay suppliers, as they simply don’t have the cash on hand. This has left suppliers unable to pay their own bills due to these late or missed payments. Responding to our customers’ feedback, we accelerated the development of Plastiq’s card acceptance product in order to reduce cash flow burdens and unblock the flow of vital services and supplies,” Buchanan said.
No card payment fees for 12 months
Plastiq’s card acceptance product lets SMBs accept credit card payments for free, without paying the typical 2.75%-4% fees charged by traditional payment services providers.
By offering a credit card payment option to their customers through Plastiq, SMBs get paid on time and more reliably, enhancing cash flow in the supply chain and getting businesses moving forward again.
SMB customers gain an extra 30-45 days of leeway between the biller due date and their credit card statement due date and SMB clients maximize working capital while also conserving cash during this period of economic uncertainty. At the same time, customers’ on-time payments through Plastiq help keep the supply chain moving without delays.
Plastiq’s card acceptance service includes a simpler workflow and easy reporting integration to track accounts payable and receivables. A custom payment page gives SMBs the convenience of a standard merchant account without the traditional fees and integration hassles.
Deposits can be made direct to bank accounts and SMB customers can benefit from early pay and bulk purchase discounts while also earning rewards on their credit cards were available.
Payment enhancements ahead
Buchanan says before the end of the year, his company plans to add accounting tools like QuickBooks and Xero, invoicing software such as Wave, and CRM integration tools.
He said after the initial no-fee year of service, Plastiq will continue to offer a free service tier with some volume limitations. Additional price tiers will also be available depending on how many features are needed and the volume of transactions processed annually, resulting in a simple fixed monthly fee that can be prepaid for a year.
“We are also offering a custom pricing tier for enterprises with special integration needs. These will include the highest level of powerful and customizable experience with all features plus direct reporting and Plastiq API access. This will also come with Plastiq development and support for all your specific business needs such as single sign-on or native integration,” Buchanan added.
Plastiq works with all major credit card providers, including Mastercard, Visa, and American Express, and its automated payment platform now serves more than one million clients, processing billions in payments for a wide range of expenses, from business supplier payments to contractors, taxes, and rent.
SMBs who sign up for the waitlist will receive early access to Plastiq’s card acceptance product free of charge beginning May 24, with general availability later this summer. More information and waitlist registration are available here.
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