CONEXT is offering business’ what Ingo Money offers consumer prepaid accounts, except with higher load limits and account to account transfers. This will be very useful for small business that are underbanked or unbanked. But also for small businesses who have a bank account but cannot wait the 3-5 day float period and need immediate funds availability.
In order to load funds onto the network, users have to go to a CONEXT reseller or use remote image capture on a mobile device.
Other primary cardholders can receive real-time, direct transfers of up to $50,000 daily through the CONEXT Network, while qualified cardholders can get up to $100,000.
Offering real-time, secure transfers
For many business the cost for immediate funds (in this case 2.5% of the amount of the check) outweighs the domino effect on the business if accounts payable and payroll are not met on time. Often small business’ need assistance with cash flow and this product will do the trick, 2.5% is very reasonable compared to an advance on a line of credit for a much higher interest rate, if option is even available.
To load funds to the network, users will be charged a fee of 0.5%. Furthermore, users will have to pay a 2.5% funds availability fee to the CONEXT reseller.
However, fund transfers to another cardholder or accepting fund transfers is delivered free of cost.
CONEXT founder Michael Casalini said: “With CONEXT, we’ve set out to build a truly customer-centric B2B payments network by addressing the fundamental challenge of making funds available in real-time on a scale that works for small-to-medium-sized businesses.
“As payment cycles have gotten longer, businesses are getting paid an average of sixty-to-ninety days after services are rendered. It’s simply not feasible for small business owners to endure a three-to-five day holding period. By leveraging today’s technology and pioneering a model based on up-front transparency, we believe we can disrupt traditional business finance.”
The new network has already been beta-tested in New York, Georgia, and Florida last year. Plans are on to launch the network across all 50 US states this year.
This is the next wave of prepaid offerings for the United States, except the focused is now on small businesses needs rather than consumers. However, it just happens to be many of the same issues prepaid solved for consumers.
Overview by Sue Brown, Director, Prepaid Advisory Service at Mercator Advisory Group