Zipmark Enables Digital Checks

April 18, 2013

Zipmark, a New York City-based startup enabling businesses that typically accept paper checks to accept e-checks online and via mobile, has partnered with Rearden Commerce to enable B2B online payments.

The three-year-old Zipmark is led by CEO Jay Bhattacharya, an entrepreneur who had sold a previous mobile-banking venture to Intuit. He founded Zipmark when it became clear there wasn’t a simple way for someone to accept a check payment online.

“You either had to direct a user out of band to do a wire transfer or collect their credentials and do an ACH transfer, and when we talked to businesses we found that wasn’t the best thing for them,” Bhattacharya said. He also explained some of the risk merchanst carry with ACH transfers that many are not aware of.

“With an ACH, the merchant or biller is responsible for validating the credentials of the payer,” he said. “On top of that, what few merchants know, but many are subject to, is that ACH carries a repudiation right. If I try to pay a bill with ACH, the merchant is withdrawing funds from my account. Because the account is being acted upon by a third party, the payer has a right, according to NACHA rules, to call the bank up to 60 days after the transaction and the bank will reverse the transaction, very much like a chargeback on a credit card.”

Zipmark’s solution, aimed mainly at B2B payments and certain sectors like rent payments where paper checks still rule, creates and settles checking account payments in nearly real time. Recently, the company signed an agreement with Rearden Commerce, creator of the Deem syndicated commerce network. Under the agreement, merchants in the network can pay Rearden Commerce for the offers and marketing they get from the network with Zipmark digital checks.