What do a 26-year-old Harvard graduate, the ex-CEO of American Express, and top venture capital firms have in common? The answer is Plastiq: a fast-growing private company with ambitions to revolutionize the way the world pays its bills.
Plastiq is the brainchild of CEO and co-founder Eliot Buchanan, who came up with the idea while he was still a student at Harvard. Eliot struck on the idea when asking himself as an undergraduate student at Harvard in 2011: “Why can’t I pay my tuition with a credit card?”
Five years later, Plastiq has processed millions of dollars of payments for hundreds of thousands of customers, forged strategic partnerships with Visa, Mastercard and American Express, (2) and has a board of advisors comprised of payments industry titans like the Former CEO of American Express, president of Paypal, and COO of Worldpay.
Plastiq has also attracted investment from some of the top venture capital firms:
- Khosla Ventures, which has invested over US$2.75B and backed companies like Square (IPO at $4B in 2015), Indiegogo, and Yammer (recently acquired by Microsoft for $1.2B)
- Atlas Venture, which has invested US$1.8B in companies such as DraftKings, AppNexus, and FreshBooks.
Plastiq changes the way people and businesses pay their bills, by allowing its users to pay for anything with a credit card… even if the merchant does not accept credit cards. Americans write over 18 billion checks each year because many businesses still do not accept credit cards. However, paying by cheque is slow and inconvenient. This is the simple yet powerful idea behind Plastiq: make it possible for anyone to pay for anything with their credit card.
This may sound like a complicated feat, but Plastiq makes it easy for the end user. The company makes this possible by flipping the traditional credit card model on its head:
- Customers sign up for an account with Plastiq, add a credit card, and provide details of the vendor they wish to pay.
- Plastiq charges the desired payment to the customer’s credit card, and pays the vendor by cheque or money order.
- Plastiq charges the customer a percentage-based processing fee for using their credit card.
Customers are happy to pay the fee in exchange for the convenience of paying by card (and collecting the rewards that may come with using it), and merchants are happy because they do not have to accept credit cards directly (thereby not paying the credit card processing fees). Not surprisingly, Plastiq has grown tremendously and has processed hundreds of millions of dollars through its platform in just three years.
Industry titans taking interest
Industry titans have taken notice of Plastiq’s success in the notoriously cutthroat world of payments processing. Advisors include payments industry legends like Harvey Golub, CEO of American Express from 1993 to 2001; former Paypal president Scott Thompson; and former WorldPay CEO Jeff Robison.
Plastiq recently raised a $12 million round. InvestX was able to offer members the opportunity to participate in a $1 million over-allotment allocation.(1) This opportunity is now closed; check the Deals Page for current private equity opportunities.