Problem: While reading fundraising announcements on TechCrunch, I saw two interesting statistics in the Payroll API space:
There are 200 million American employees, over $8.8 trillion of payroll is processed annually in the U.S. and the country’s 11,000 tax jurisdictions produce over 25,000 income tax code changes a year.
IRS data shows more than 40% of small and medium businesses pay at least one payroll penalty per year.
As described by Packy McCormick, “$8.8T in yearly payroll processed, employers building their own payroll systems, and strong competitors.”
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Solution: This business would build out more Payroll APIs to be competitive with recently-rising companies like Zeal, Abacus, ADP, or Paycor. Broadly, this would play into the broader movement of “embedded finance as a service” which purports (as described by Romain Dillet), “companies that don’t necessarily provide financial services can embed services from fintech companies directly in their products. At the same time, fintech companies can find a new distribution channel by providing financial products outside of their main product. They don’t necessarily need a consumer product anymore.”
Through discussing with customers, this business would focus on innovating unique payroll solutions and iterations to make it easier for small businesses to pay their employees.
Monetization: Transaction fees.
Contributed by: Michael Bervell (Billion Dollar Startup Ideas)
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