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Plastiq is not a fancier way to say “plastic.” Its payments system connects consumers with merchants to complete credit card transactions online.
The startup from Boston has locked up $6 million in its second round of institutional financing to continue growing its network of customers, merchants, credit card associations, and financial services providers.
Plastiq sets up credit card payments in sectors that generally rely on checks and cash. The service is primarily geared toward large costs, like tuition, cars, donations, taxes, and real estate. Merchants that want to offer their customers more flexible payment systems can use Plastiq to set up an installment schedule and enable payments from anywhere. They can also set up loyalty and rewards systems to drive marketing and sales.
Additionally, it tracks and reports on all of the data that goes through the portal. Using a dashboard, universities, car salesmen, real estate agents, or landlords can access their most recent transaction information as well as transaction history. The API is integrates with existing website and accounting systems to keep all records in one place.
Plastiq is comparable to PayPal’s merchant services — except that’s free. Consumers pay a small fee for each transaction. However, Plastiq said they seem to be willing to pay for the added convenience and control of using their credit cards “in situations when they previously could not.”
Founders Eliot Buchanan and Daniel Choi met at Harvard’s Innovation Lab where they first developed the idea. Atlas Venture and Flybridge Capital Partners led this round, with existing investors NextView Ventures and Greenoaks Capital participating. Plastiq has raised $8.35 million to date.
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