This brief piece is posted in yahoo! money and discusses an announcement from Womply, a 2011 startup out of San Francisco. The announcement is about a commerce platform for small businesses that provides apps, APIs and marketing solutions, as well as some financial tools. This new service is called Womply Bills and basically allows for businesses to pay their bills using a credit card, even if the supplier does not accept cards. The timing of the announcement is interesting since the pandemic has caused many buyers/suppliers to re-evaluate their analog cash processes given cash flow issues.
‘Businesses continue to spend a significant amount of time and resources to pay important bills (like rent, utilities, and taxes) from vendors that often do not accept credit cards. Simultaneously, many businesses aren’t able to access capital when they need it most, because banks and other lenders fail to extend it during these unpredictable times. Womply Bills solves these problems by allowing businesses to use their existing credit cards to pay any business, ensuring their payments are made on time while preserving their cash on hand for any unforeseen emergencies.’
Mercator Advisory Group has not received a briefing on the business model but we assume the way it works is that Womply is the merchant of record and settles with the payer’s supplier downstream. Based on a brief website review, it seems the company settle with the billers using checks. We are a bit surprised that ACH is not used given it is antithetical to the positioning of the service but perhaps that is a next development. Womply tracks the payment and charges the payer business 3% of the payment amount for the service.
‘Womply Bills is designed to alleviate pain points that have been exacerbated by the economic impact of Covid-19. According to The Washington Post, 97 percent of companies say they still cut paper checks to their business vendors and receive checks from their business customers. Additionally, most businesses still pay at least 50 percent of their bills using paper checks, even though they lose anywhere from $4 to $20 to cut, mail, and process each paper check within their network.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group
