Regular payments between businesses that regularly do business with each other can go through an electronic check process that delivers funds the next business day from a company called Zipmark.
Launched in 2010 by Jay Bhattacharya, Zipmark makes it easy for companies and individuals to exchange money from their bank accounts without going through a holding account like the one PayPal uses, he said.
“We wanted to work with businesses with low risks, like paying bills. Businesses that have relationships with customers, like law firms and accountants, shouldn’t have to pay for risk management and use a holding account. We wanted to collect all the information about a transaction, understand the intent of the payer, and from that point draft a check from the payer’s account and submit a credit to the merchant. Our payment will clear and settle by the morning of the next day, which is very helpful for growing businesses.”
Zipmark’s first step is to conduct due diligence of the merchant including “Know your Customer (KYC) which its bank partners require. The merchant then informs Zipmark that a customer owes its a specific amount. The customer is shown the amount by email, the customer can then confirm the debt and authorize direct withdrawal from his bank account through the Zipmark Web site. The money moves overnight using Check 21 and nonreversible ACH credits. Zipmark is a web platform whose services are available via API and its website. Email is used to notify payers and recipients and every user gets a real-time receipt for transactions via email.
The company also offers a service for recurring payments like parking garages and marinas, Bhattacharya added. One client has 75 parking garages in New York and use Zipmark to get online and collect payments without the expense of credit cards.
“One of our strongest markets is residential real estate rent collection,” he added. “A Remax franchise uses our billing model to collect payments. Renters see an email with a button to click to pay their rent online.
“That takes them to a portal we host that is branded for Remax. The tenant keys in her address or unit number and is presented with her rent invoice. She can review everything, and at bottom it says Pay with a Digital Check.” One click and it is paid.”
When a tenant signs up, Zipmark collects her bank details, some personal ID, the last 4 numbers of her of Social Security and her drivers license number.
“Zipmark is a check writing service and we need to be sure the person logging in and registering is a signatory on the bank account , so we verify in real time with companies like Early Warning, and then the user is asked if she wants to authorize a check for this purpose.
“We tell companies like Remax that moving to online rent payments is a convenience for tenants. It is positive for retaining tenants and being competitive. What they really love is they are getting the money on the books faster. Most real estate companies are handling on checks on a monthly basis. Once the invoice is sent out, the best they can do with traditional payments is to have them on the books by the 15th or 18th. We tell them that on first of month payment reminders go out and anyone who authorizes a payment provides good funds to the company the next day.”
Bhattacharya said a growing number of New York companies have significant payables on a daily or weekly basis. Rather than use a manual-input ACH process from a bank or ACH provider, they can use Zipmark by integrating its API with their business systems. Businesses can integrate the Zipmark API for real-time payments or use a secure file upload process for daily batch files.
“We have a catering company that pays out to its restaurant vendors every week. They hit our API with their payment information, it queues up and goes to the restaurants.”
Zipmark was a member of the first New York FinTech Innovation Lab.
The Zipmark Deposit payout service starts at $0.50 per transaction with packages at $249 permonth. Zipmark Collect for receivables starts at 1percent with a maximum of $5. Lower prices are available for higher volumes and lower risk businesses.
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