Disclaimer: I'm the founder of Checkbook.io ( a payments platform with a single API for sending payments)
There are 2 parts to any payment, the sender side and the receiver side. Bill.com has historically pulled all the funds from the sender's bank account and held them in a custodial bank account controlled by Bill.com to pay out the recipients
They have earned float on this amount and given they are a public company you can see from the historical statements what percentage of their earnings are from carrying such float. (It depends on the interest rate and given the rates have been low recently it was about 10%-20% historically, may increase or decrease)
They have decided to do the same on the receiver side now i.e. instead of disbursing funds to the recipient they will simply hold them until the recipient manually collects them. This is somewhat unprecedented in the payments world - I don't know of any other Business payments processor doing it. It's basically a paypal type wallet being foisted on the recipient without an opt-in
In so far as "Are they allowed to do so" ? Bill.com is registered as a Money Transmitter (not a bank ) so in partnership with their bank they can do this. From the principles of ...let's say "generally acceptable payment processing rules" this is bad, particularly since it's an opt-in
There are multiple other alternative payment processors available, including the company I work for
There are 2 parts to any payment, the sender side and the receiver side. Bill.com has historically pulled all the funds from the sender's bank account and held them in a custodial bank account controlled by Bill.com to pay out the recipients
They have earned float on this amount and given they are a public company you can see from the historical statements what percentage of their earnings are from carrying such float. (It depends on the interest rate and given the rates have been low recently it was about 10%-20% historically, may increase or decrease)
They have decided to do the same on the receiver side now i.e. instead of disbursing funds to the recipient they will simply hold them until the recipient manually collects them. This is somewhat unprecedented in the payments world - I don't know of any other Business payments processor doing it. It's basically a paypal type wallet being foisted on the recipient without an opt-in
In so far as "Are they allowed to do so" ? Bill.com is registered as a Money Transmitter (not a bank ) so in partnership with their bank they can do this. From the principles of ...let's say "generally acceptable payment processing rules" this is bad, particularly since it's an opt-in
There are multiple other alternative payment processors available, including the company I work for