That opportunity attracted a seed round from Boost.vc, Rocketship.vc, AngelList’s founders, and a slew of angels including Tim Draper. Rather than try to sell Checkbook’s convenience to companies one at a time, it hopes to gain viral traction and parlay that into real customers. The business model works a bit like Dropbox in the sense that Checkbook gives away its service to consumers in hopes of infiltrating businesses that it will charge.
“This is a 100-year old problem no one was solving” Gupta insists. Gupta figured out how to build Checkbook on top of the existing ACH payments and Check21 infrastructure because he was the chief architect of Visa’s network. Checkbook effectively makes sending checks as quick as Venmo or PayPal, but without fees even when you pay large amounts to businesses. I can login with my bank and deposit it instantly, or print it out and deposit it at the bank or ATM like any normal check. Sure enough, I open my email, and there it is. “I was sending you a check while you were talking” Checkbook founder PJ Gupta tells me. It’s one of those classic startup businesses where you just wouldn’t expect that tech could cut prices so low. Yet conducting the money transfers over the traditional banking backend costs Checkbook merely pennies each time. With over 19 billion checks for over $30 trillion sent in 2013, B2B checks cost businesses $25 billion a year.
And for businesses it can cost between $7 and $16 to send a check, and $1.50 just to receive one, according to Aberdeen Group, Bank of America, and the AFP Payment Cost Benchmarking Report. With paper checks, you have to keep a deck of them on hand plus pay for envelopes and postage. What’s remarkable is that it’s totally free for individuals to send up to 50 checks a year, and for businesses, it’s just $1 per check. That’s exceedingly cheap and easy.
The startup today launches its digital check service where you can send anyone a check with just their email address, and they can deposit it immediately online to get their money or even print it out.
If you’re sick of running out of paper checks and stamps or hassling with routing numbers to send zero-fee payments, you can bank on Checkbook.
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