Why instant payouts are great for service providers, SMBs, and the wider economy

The rapid growth of the eCommerce market presents the opportunity for you to address a real pain point for your customers.

SMBs that have successfully navigated the fallout from the pandemic now face the daunting reality of doing business amid the recovery. It’s an unfortunate truth that the reason many businesses fail within their first five years is as a result of poor cash flow management or a poor understanding of cash flow. This is something that SMBs are clearly concerned about as a recent Intuit study found that “69% of small business owners are kept up at night with concerns about cash flow.”

The problem

According to J.P. Morgan Chase, the average small business only has the equivalent of a 27 day cash buffer on hand. A growing reliance on revenue from eCommerce platforms, driven in part by societal changes brought about by the pandemic, is compounding this problem further with some businesses waiting more than 14 days to access revenue from their online stores. 

When you consider that many businesses are required to invest significant sums of money upfront on the stock required to sell their products online, it’s easy to see how even the most experienced business owners can fall into difficulty. For instance, the Intuit study also found that over half of UK and US business owners have lost at least “$10,000 or more by foregoing a project or sales specifically due to issues created by insufficient cash flow.” Constraints like this materially impact a business’s ability to operate; hampering growth, or forcing them into high interest debt. 

The solution

Codat makes it easy for you to offer instant payouts by providing seamless access to your customers’ eCommerce and point of sale data. Instant payouts are mutually beneficial –  they are a low risk and flexible way to attract new customers, improve satisfaction, and boost revenue.

Why the opportunity is now

It’s clear that access to cash is crucial for SMBs and the long term viability of many will depend on their ability to accurately manage cash flow in these particularly unpredictable times. Ensuring their long term survival is not only the right thing to do, it’s good for the economy too. In most countries, SMBs account for as much as 50% – 70% of GDP.

The pandemic has given rise to a new generation of digital-first businesses. In March of this year, it was reported by the Census Bureau that more than 4.4 million new businesses had been created in the US in the last 12 months. Many of these new businesses will already be on the lookout for funding. Afterall, 79% of businesses fail as a result of starting out with insufficient cash. Unfortunately, this will be an uphill battle with few lenders even considering businesses that have been operating for less than twelve months. This presents a substantial untapped market for service providers.

By advancing your customers the funds due from their commerce platform, you can generate additional revenue by cross-selling new, paid products while also addressing a key pain point for new business owners and developing lasting relationships with your customers. Given the increasingly competitive commerce landscape, driven in large part to low switching costs, financial service providers who do not offer instant access to revenue stand to lose customers and long term revenue to competitors. 


To find out more about how Codat could help you bring new, paid products to market quickly, contact info@codat.io or start your free trial today.