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Talie Baker, an analyst with the consultancy Aite Group,
Insider’sreport discusses this in Business-to-Consumer Disbursements in the
U.S.: The Small-Business Opportunity. The report draws on
on payments a survey of consumers, which indicated that 28 percent
own small businesses, and that 5 percent had received
disbursements for their small businesses from a merchant
acquirer and/or a lender.

For purposes of this survey, a small business was defined
as one that generates $10 million or less in yearly revenues.
From the data provided, it's safe to assume that most
Instant funding: next generate far less than $10 million yearly in revenues.
Small-business owners who reported receiving payouts of
card payments, for example, averaged 9.4 disbursements
big trend in merchant in 2018 and received an average total of just over $6,800
in disbursements. Those receiving small business loan
services? disbursements averaged 2.6 disbursements each totaling
an average of just over $6,000.

By Patti Murphy Based on the survey responses and additional research,
Baker estimated these types of disbursements to small
ProScribes Inc. businesses amount to 96 million transactions totaling
$645.2 billion a year. Here are further data points that
f there is one constant in the payments acquir- struck me: 31 percent of small-business owners receiving
ing space, it is change. As someone who has been disbursements from merchant acquirers and lenders
involved in banking and payments for more than 40 received those payments via direct deposit, and 30 percent
I years, I can attest to this fact. Forty years ago, nobody received payments by check in 2018. In addition, 18 percent
knew what a debit card was. ATM cards were proprietary; received payments via debit cards, 14 percent via digital
shared regional networks were several years off. wallets, 24 percent took in disbursements via PayPal
accounts, and 8 percent reported receiving disbursements
As for credit cards, the few merchants who accepted them through Zelle.
had to paw through paper reports to determine if a card
presented for payment was in good standing. Then about "As U.S. small business owners become more familiar with
once a week they would bundle and deposit paper tickets, the real-time payment capabilities offered through the card
and wait weeks before receiving bankable funds in return. networks as well as PayPal and Zelle, demand will increase,
Electronic data capture and authorization were several making direct deposit and check less relevant," Baker said.
years off.
Baker's report was commissioned by IngoMoney, which
Direct deposit via the automated clearing house network, began as a mobile app that allows consumers to cash
meanwhile, was a brand new concept and not widely used. checks (using mobile deposit technology) and have the
But if the changes ushered in by technology advances in the funds posted to a prepaid or traditional debit cards. At 1
late 20th century were big, changes that have occurred in to 3 percent of the check amount, the fees undercut those
consumer buying habits and merchant expectations in the charged by typical brick-and-mortar check cashers.
early 21st century have been nothing short of monumental.
Ingo recently began rebranding itself as "the instant money
Changes like the move to online and mobile shopping, company." It has a partnership with Visa, and launched
mobile payments, free terminal deployments, electronic an initiative in 2018, Ingo Money QuickConnect, which
loyalty programs, and merchant cash advances taken leverages Visa Direct. Visa Direct supports near-real-time
together have radically reshaped the competitive landscape. payments (within 30 minutes of initiation) to traditional
and prepaid debit card accounts at Visa-issuing financial
Now it's beginning to look like another big change is in institutions. Drew Edwards, Ingo's founder and CEO, told
the offing: instant funding of merchant accounts. Think of me recently that instant funding solutions are driving
it as real-time payments, but in a context that makes the much of the company's growth. "We're enabling companies
most sense for businesses accepting credit and debit card to make digital payments to consumers and micro-
payments: faster payments for credit card receipts. My businesses," he said.
sense from conversations with ISOs and merchant level
salespeople (MLSs) is that not many merchant acquirers Visa and Ingo are not alone in the push for faster payments.
or small business lenders offer instant funding today. But Mastercard offers a service called Mastercard Send that
there are opportunities for those that do to take market is similar to Visa Direct. Last year, Mastercard disclosed
share from those that don't.
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