A new partnership between two San Francisco Bay Area fintech heavyweights — Plastiq and Tipalti — will enable businesses to use their corporate credit cards to pay suppliers even if those suppliers don’t accept credit cards.
The new relationship will allow Tipalti corporate customers that use Plastiq to free up 30 to 45 days of cash flow by paying invoices with their credit cards. To take advantage of this, a business must sign up for Plastiq and use their existing credit cards to pay suppliers. Tipalti’s clients will be able to extend payment terms and earn credit card rewards on any kind of business expense, such as rent, equipment and advertising.
“Providing Tipalti customers with a flexible, cost-effective way to fund their payables transactions with Plastiq frees up funds to reinvest back into the growth of their business,” Chen Amit, co-founder and CEO of Tipalti, said in a news release.
The Plastiq app lets small and midsize businesses as well as consumers pay for a variety of things with credit and debit cards even if the payment recipient doesn’t accept those payment methods. San Francisco-based Plastiq charges a 2.85% fee for the credit card service and a 1% fee for the debit card service. San Mateo, California-based Tipalti produces payment automation and management software for businesses.
Plastiq processes card payments and sends them in a form that recipients already accept, either by electronic bank transfer or check. Recipients don’t need a Plastiq account to accept card payments submitted through Plastiq.
“The Tipalti partnership opens up a unique market for us for high-velocity businesses,” Eliot Buchanan, co-founder and CEO of Plastiq, said in the news release. “More businesses will be able to use their corporate cards as a funding source while both recouping their rebates and reducing risks associated with accounts payable processes while still automating workload.”
Plastiq says its app has powered more than $2 billion in transactions. The app has over 1 million users in the U.S. and Canada. The company’s strategic partners include Visa, Mastercard, American Express, US Bank and Silicon Valley Bank.
According to Crunchbase, Plastiq has collected $141.8 million in funding from 19 investors since it was founded in 2012. In March, the company announced it had raised a $75 million Series D round led by B Capital Group. Other investors in the round included Kleiner Perkins, Khosla Ventures, Accomplice and Top Tier Capital Partners. Forbes says Plastiq’s valuation ranges from $700 million to $800 million.
In October, Tipalti raised a $150 million Series E round at a valuation of more than $2 billion. Durable Capital Partners led the round; other investors included Greenoaks Capital and 01 Advisors. In all, Tipalti has garnered $295 million in funding from nine investors since it was founded in 2010, according to Crunchbase.
The B2B payments space continues to heat up. Last month alone, both Mastercard and Visa unveiled virtual card offerings, which FinLedger reported on here and here.