Aiming to bring the ease of peer-to-peer payments to the business class, Bento for Business announced the launch of Bento Pay, a payment service that eliminates the need for business owners to write checks.
The service, which will be available in July, enables business owners to make and receive payments with an email address. The vendor gets to choose to get paid by a virtual card or ACH payment to their checking account. Bento for Business co-founder and Chief Executive Farhan Ahmad said the service is a first for an industry that has long relied on paper checks and time-consuming processes to make and receive payments.
“The old world of the ‘check is in the mail’ hasn’t shifted,” for small businesses, said Ahmad. Bento recognized that and created an easy way for small businesses to securely move payments to digital formats. “In the B2B world, you need a higher level of security. It’s one thing to pay $7 to share a pizza. Paying someone a couple of thousand dollars for an invoice calls for a more robust level of security.”
According to Bento for Business the b2b small business commerce market is slated to reach $9 trillion by 2020 in the U.S. but about 80% still use paper checks for payments. That presents an opportunity for payment companies to capitalize on the inevitable shift. Lots of advances have taken place on the consumer side with the advent of digital and contactless payments but businesses are still beholden to the old way of doing business. Bento for Business pointed to recent Deloitte Consulting research that found there is a $100 billion revenue opportunity as more businesses migrate to digital payments.
Bento for Business isn’t alone in aiming to move small businesses into the digital payments world that consumers have long embraced. In April Bill.com raised $88 million in venture funding at a valuation of more than $1 billion and announced it inked a strategic partnership with Mastercard. Through the deal, Bill.com will offer Mastercard virtual cards as part of its automated accounts payable service for small and midsize businesses, eliminating the need to pay via checks. “We see the marketplace at a tipping point when it comes to B2B payments,” said René Lacerte, CEO and Founder of Bill.com said at the time. “A lot of attention is focused on how to make checks go away.”
Small businesses are on the hunt for ways to take the complexity out of the equation and to move to payment options that are easy, flexible and secure. They see family and friends sending each other money in seconds and want that same functionality in their business lives.
Bento for Business is currently testing the service before the July launch. Ahmad expects it to resonate with its small business customers but acknowledged there will be a learning curve as customers get used to the idea of making payments with just an email. By using an email address it eliminates the need to inquire how a vendor wants to be paid, reduces mistakes in entering the wrong routing or checking account numbers and speeds up the time it takes to make and receive payments. The service also rounds out Bento’s payment offering. It now includes debit and virtual cards, real-time payments, and ACH transfers. It puts the company, which started out focused on spending and expenses management in new areas.
“Until now, we’ve seen no meaningful revolution in the B2B fintech space that can viably address the underserved needs of SMBs,” said Ahmad. “We envisioned Bento as the financial operating platform of choice for SMBs, and the addition of real-time payment capabilities is a continuation of our vision. With Bento Pay, we are transforming the way businesses pay each other.”