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Grow Your Business Finances

Kabbage Launches Payment Processing Solution

image for Poike / Getty Images
Poike / Getty Images
  • Approximately two-thirds of Kabbage's customers reported waiting up to 90 days to receive payment from clients.
  • Through new tech solutions, Kabbage Payments is expected to reduce the time it takes for small businesses to get paid, with many remittances received within 24 hours.
  • According to Kabbage, today's release is the first in a line of new products slated to launch in the coming months.

One of the most important things a business needs to be successful is a steady cash flow. Receiving payments and processing them into the appropriate accounts is key to a company's survival, yet business owners must often wait for weeks or even months to receive payments. Earlier today, Kabbage launched a new payment processing solution that aims to significantly speed up that process.

The company touts Kabbage Payments as a "new payment-processing solution for small businesses that makes getting paid faster as simple as sending a text message." Company representatives say the new service will make one of the more frustrating parts of business ownership a little less of a headache.

"Since 2011, we've helped hundreds of thousands of small businesses access over $8 billion in funding," said Kabbage CEO Rob Frohwein. "We know firsthand a primary need is to cover cash flow gaps while waiting to be paid. Kabbage Payments not only expands our suite of products, but the very definition of our company. We deeply believe in the mission of small businesses and understand what they need to succeed – namely, more time building their businesses and less time worrying about cash flow."

With today's launch, existing Kabbage customers can now take advantage of Kabbage Payments, though any business owner can request access.

The main idea of Kabbage Payments is to speed up the entire invoicing and payment process. Prior to today's release, the company tested the service through a beta program with some existing members. Lee Brewer, the owner of New York City advertising firm Lee Brewer Enterprise, said the new service alleviated problems he's had for years.

"My clients receive dozens – if not hundreds – of invoices a month, so it's easy for them to pile up and be paid out all at once," he said. "For years, I've waited anywhere from 15 to 30 days to get paid for my work. Now, I send clients my Kabbage custom pay link through email or WhatsApp and get paid the next day. This has helped me collect so quickly; my cash flow concerns were eliminated, seemingly overnight."

Deposits via Kabbage Payments are in the business's bank account by the next day, though they have to be processed by 5 p.m. EST. Any transactions made after then will be deposited within two banking days.

 

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As a small business owner, you probably already know that completing a job and sending an invoice doesn't necessarily mean your payment will come in a timely manner. According to Kabbage, approximately two-thirds of its 200,000 customers use invoices but still "wait as long as 90 days to be paid." You may be forced to wait for payment, but expenses like rent and utilities have hard deadlines.

To address this issue, the company says Kabbage Payments stands as a "fully automated working capital solution." By leveraging today's tech, Kabbage Payments "drastically reduces the time required to receive payments in typical net-term invoicing." In many cases, the company says, payments can be received within 24 hours. 

Kabbage Payments does that by handling invoices online through an all-in-one dashboard. Along with creating a custom URL for their businesses, users can send secure payment requests via SMS, email or the web.

The company also offers an invoicing solution. Once a business begins using Kabbage Payments, they are free to send unlimited invoices and estimates with no monthly fees. The only fees you pay are credit card processing fees for the payments you receive through the service, which cost 2.9% plus 25 cents per payment.

Andrew Martins

Andrew Martins is an award-winning journalist with a Bachelor of Arts in journalism from Ramapo College of New Jersey. Before joining business.com and Business News Daily, he wrote for a regional publication and served as the managing editor for six weekly papers that spanned four counties. Currently, he is responsible for reviewing tax software and online fax services. He is a New Jersey native and a first-generation Portuguese American, and he has a penchant for the nerdy.