Gig Economy uses FinTechs for instant payments

The next generation of small business owners, freelancers, and gig workers have grown up using platforms like Venmo and other instant payments, which has given them payment experience expectations.

“This new generation of talent has grown accustomed to instant payment transfers in their personal lives, and now they want those same fast, free services for their businesses,” Reed Switzer, CEO and co-founder of Hopscotch, told PYMNTS. .

Hopscotch is a startup that aims to address this need by facilitating instant and free business-to-business (B2B) payments for small businesses and startups. On Tuesday (March 8), the company announced the launch of its private beta in tandem with a $6.1 million starter expansion that brings its total funding to $9.95 million.

Reduce friction in B2B payments

Switzer said the need for services like Hopscotch has been heightened by the pandemic, which has led many businesses to run out of cash while forcing them to switch from traditional payment methods to ones more suited to the world. digital.

“I think the reason Hopscotch is needed is twofold,” Switzer said. “The first is that businesses should be able to operate without having to wait or pay to access the money they have earned. And then, #2, a lot of small business owners just want in, and they want to get paid and pay with as little friction as possible.

Aimed at serving tech-savvy SMEs

Hopscotch aims to serve small and medium-sized enterprises (SMEs) with one to 15 employees in the area of ​​business services – marketing, advertising, public relations agencies and other small entities that primarily serve other businesses.

Switzer said these entities tend to be tech-savvy and uninterested in the complex payment platforms used by large corporations.

“Our users come to our platform, they manage their accounts receivable and payable through us on a day-to-day basis, and they can integrate with QuickBooks and other [business software] providers to have everything automatically reconciled for them without them having to lift a finger,” Switzer said.

Build on lessons from small businesses and startups

The company announced its initial funding in October and invited its first group of pilot users on board in February. It has been working with them to refine its platform ahead of its full beta launch, which is slated for April.

Switzer’s own experiences in small businesses and startups led him to see this need in the market, which he set out to fill with Hopscotch.

While working to build her own brand in the apparel industry, Switzer spent two years learning logistics, supply chain management and other skills. He then joined a startup that was building a music streaming service and spent three and a half years involved in all day-to-day operations of that company.

“So from learnings in the apparel and startup space, that’s what seeded the idea for Hopscotch,” Switzer said.

Related: Use of virtual card, choice of payment, up

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About Mark A. Tomlin

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