Sometimes stalling the inevitable can help a lot.
And BillFloat, a new startup that TechCrunch reported on today, wants to help consumers do just that when it comes to paying bills. Simply put: BillPay will pay your bills (everything from cable to autos) to buy you a little more time before you have to ante up.
2. BillFloat pays your bill; and
3. You settle up with BillFloat up to 30 days later. (An additional fee will be charged.)
BankInnovation’s founder and publisher JJ Hornblass offers two points to consider in his reply to TechCrunch’s post:
From a consumer standpoint, a key will be access to billing portals, in my view. A big part of PayPal’s value is in its seamless integration into the online payment flow, and in order for BillFloat to get that integration, it will need to score those “directly on billers’ websites” setups referenced above. There are already a multitude of online-bill-pay providers that facilitate payment online and there is not a telco out there that doesn’t allow for online payments. I’m not sure the need for short-term financing on a $60 Verizon bill is going to be acute enough for vendors to offer up BillFloat on their sites. Obviously, if they get a percentage of the credit revenue from BillFloat, the evaluation changes. (Any word on that?)
Second, it is tough to say whether this will work, as a venture, without understanding the risk assumptions and the reserve requirements. For example, if BillFloat will require a substantial credit facility to handle the “float” (its short-term outstanding debt), then those credit costs could erode the venture’s potential profitability. It will depend on the amount outstanding and the duration of that amount outstanding. The longer the duration and/or the greater the amount outstanding, the higher the credit costs — the lower the net return to BillFloat. Without these data points it is tough to say whether BillFloat will suck or soar.