History of —How to solve the “million-dollar” question – payment delays

This little historical account will focus on what others have offered to businesses as help to solve their payment delays.

1- Pre-tech boom (before 1990s) the main vehicles others have offered to help businesses is – Outsourcing of Receivables, and Factoring. (Factoring means that a Creditor loans money to the business against its receivables). These two have existed in last two centuries of Capitalism. During this “stone age” payors paid late about half of their invoices.

2- Technology boom that started in the 1990s gave rise to a myriad of electronic tools that promised to finally “solve the problem.” New tech, on-premises or hosted, such as Invoice presentment, online payment processing, accounting software for receivables / payables emerged as the new hope of finally solving the problem. When moved online, even old-world tools such as Receivable Outsourcing got new sexy names, such as BPO (Business Process Optimization). Factoring companies built new flashy storefronts, yet their core processes still ran the same way.

Talking about Factoring — new players have entered the market, they have given themselves even more sexy names, such as fin-tech. For example Blue-Vine and Resolve. Resolve is a spin-off of Affirm (large consumer credit loan shop) backed by founder of Paypal.

But after 30 years of tech boom, payors remain stubborn — they still pay late about 50% of their bills. Why haven’t these payors budged? We think we have an answer to that, and built Payclass to design a better “mouse-trap”. Stay tuned….