Payments

Checkbook snags $10 Million to throw out your paper checks

Checkbook, a California-based online payments processor, announced Monday it raised a fresh $10 million dollar Series A for you to throw out your old paper checks.

The round, led by MassMutual Ventures, will go towards scaling Checkbook’s platform that replaces the act of writing and mailing paper checks with a simple email exchange. Other investors in the round included IA Capital, JPMorgan Chase and Cross River Digital Ventures alongside previous investors.

Checkbook was founded in 2015, when CEO and founder PJ Gupta recognized the hassle of using paper checks and collecting sensitive routing or account information to send zero-fee payments. With the platform in place, neither the sender or the receiver of the “check” needs to sign up for a service to get started and neither side sees each other’s financial information – funds can simply be deposited directly into a bank account.

The business model is similar to that of Dropbox, where the company offers its services to consumers for free with the intention of businesses it can actually charge wanting in on the tech. Individual users can send up to 50 checks a year free of charge, and for businesses, its just $1 per check. That’s insanely cheap given the price of postage, envelopes and even credit cards payments.

It’s important to establish also these are labeled “digital checks” rather than “eChecks.” eChecks are delivered via the ACH network as ACH files and require the input of account and routing numbers. Checkbooks digital checks use email encryption technology and only need email addresses to send money.

“Checkbook has the potential to become the go-to solution for push payments with its ability to cost-effectively enable businesses to send and receive payments at scale and track data in real-time online,” said Charles Svirk, Principal at MassMutual Ventures.

In 2018, Checkbook partnered with Yooz, the cloud-based purchase-to-pay platformer, to offer an automated workflow for accounts payable teams. The following year, Checkbook launched its Instant Pay feature that circumvents any need for sign up and instead requests information directly from the recipient’s Mastercard or Visa branded debit card.

By 2020, the company managed to launch its own version of a virtual card that features a one-time use 16-digit number with a pre-determined spending limit that is emailed to the recipient. The recipient can then store the information and use it when needed. Its cards were released the same day Checkbook joined Visa’s FinTech Fast Track program.

Most recently, the company announced working with financial giant Plaid to verify funding accounts for real-time transfers involving a form of digital checks. One of the first users of the integration is Mountain View, Calif.-based Stampli, an accounts-payable software provider. The integration is aimed at more easily linking client accounts for instant payments.

“We want to become the ubiquitous solution for enterprises and consumers everywhere, offering the only one-sided Digital Payment solution,” said Gupta. “We look forward to working with our investors to continue leading the way in the ‘last mile’ of push payments.”

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