Member Exclusive, Payments

SMB payment platform HoneyBook first took a hit, then saw massive payment volume growth in 2020

  • HoneyBook aims to appeal to more small business owners.
  • With so many apps with so many purposes, this could be a challenge going forward.

Email a Friend

SMB payment platform HoneyBook first took a hit, then saw massive payment volume growth in 2020

HoneyBook, a platform that helps solopreneurs manage projects and payments, recently announced that it hit $3 billion in business booked on the platform, a billion of which came from the past year alone.

HoneyBook hit $1 billion in total payment volume in 2019.

HoneyBook makes money through monthly subscription fees and through transaction fees. So when its core user base -- freelancers and event-based small businesses -- was suddenly being threatened by the pandemic, HoneyBook was, too. 

“Mid-March, when we saw so many of these service-based businesses -- these small business owners-- take a hit, we knew that we were going to take a hit at the same time,” said Oz Alon, co-founder and CEO of HoneyBook.

But by the end of March, HoneyBook started to see an increase in activity on the platform. More transactions were being processed, even from businesses that originally saw a hit. Additionally, the company started seeing more businesses join the platform -- even from verticals they didn’t serve before.

“Suddenly, we saw this nice uptick, and a nice incline all the way to the end of the year,” said Alon. “I think that's what really created the momentum that we eventually saw.”

Ultimately, HoneyBook was able to capitalize on a situation that looked like it was going to leave it shipwrecked. 

It may be the case that small businesses have always been more inclined to go digital, even before Covid-19 hit. Financially, digitalizing certain services could make a lot more sense.

“Honeybook and other customer relationship management tools offer small and medium sized businesses the functionality of additional employees without the added payroll costs,” said Cris Carillo, co-founder of Allied Payments, a payment processing consulting service that helps businesses accept payments online. “The synergy between workflow automated tools is growing every day and they can make a big difference for small and medium businesses.”

Automation in itself is a big motivator for small business owners, as well. And it may not even be an option for a business to succeed -- it may be a necessity.

“Every successful small business owner knows that there are three fundamental things they need to get right. One, they need to focus on growing the business. Two, they need to continuously find ways to do more with less. And three, cash is king,” said Andrés Ricaurte, svp & global head of payments at Mphasis, a global technology and consulting firm focused on enterprise transformation. “It is impossible to do these, at least not for a sustained period of time, without automation.”

Automation is also a way to decrease chances of human error, which could help business owners avoid a lot of damage control in the long run.

“If you have an in-house employee, they might be good, but they’re still human, and errors happen sometimes,” said Dimitris Tsapis, accounting consultant at Retail CRM Cloud, a CRM software specifically made for retailers. “But by having the process semi-automated, you can rely on the accuracy and keep a good impression on your clients.”

But even with all these benefits, platforms like HoneyBook are not without their challenges -- they can be more time consuming and costly.

These platforms often charge extra to process transactions for their customers. On top of that, it still takes them time to process payments.

“Platforms like Honeybook almost always charge more for their processing because they aren’t an actual processor,” said Kristin Uptain, marketing manager at Redde Payments. “They usually outsource their processing, which means, in order for them to make a profit, they have to tack on additional charges.”

Then there’s the fact that if users use more than one tool, things aren’t automated and the work can get messy.

“While most apps offer APIs in one form or another, the space is still highly fragmented,” said Ricaurte. “This puts the onus on the SMB itself to figure these things out.” 

HoneyBook believes it can offer a solution that provides its users with all the necessary business needs they may want -- invoicing, payment processing, client booking, and project management.

But not everybody uses HoneyBook, and other companies that offer one or two tools for solopreneurs may have already started to see the benefit of branching out and broadening their services.

The potential for competition and maintaining users' interest within a single platform are challenges HoneyBook will need to face even more going forward.

“Today, a service-based business needs to use many, many tools,” said Alon. “But if they’re a service-based business that doesn’t use HoneyBook, they will use DocuSign to sign some documents. They will use PayPal or Venmo to charge for money, or maybe they will use Square. They will use some kind of CRM to manage the communication with their client -- they’re going to use all these tools.”

“All these tools are not going to create a cohesive experience for their clients. And what these businesses understand today more than ever before is that they want to create this great experience online for their clients.” 

For HoneyBook, it’s a matter of figuring out how to keep everything in one place -- including the user’s interest.

“I think the future is the ability to close more deals online, the ability to communicate and express yourself in the best possible way online,” said Alon. “And then to leverage that, and to consume all your financial needs from a platform like HoneyBook.”

0 comments on “SMB payment platform HoneyBook first took a hit, then saw massive payment volume growth in 2020”


TikTok and payments, a match made on social media

  • Gen Z’s popular haunt TikTok is abuzz with payments activity, surpassing $1 billion in global consumer spending through in-app purchases in Q1 2023.
  • TikTok is looking to make a name for itself in the retail space in America as well, as it battles with the White House over concerns about its Chinese origins.
Rabab Ahsan | September 20, 2023
Banking, Payments

Banks can offer speed and convenience as Wise and Swift integrate cross-border payment networks

  • Swift and Wise partner for streamlined cross-border payments, benefiting banks and their customers.
  • The Wise Platform will utilize Swift's capabilities, including cloud and API connectivity, enhancing international payments for FIs with features like payment status tracking and end-to-end visibility.
Zachary Miller | September 20, 2023

Digital shopping can benefit from the creator economy

  • Despite the proliferation of online shopping, 65% consumers still prefer to shop in brick-and-mortar stores.
  • For consumers one of the major reasons to stick to in-person shopping is their ability to try on products and test them.
Rabab Ahsan | September 19, 2023
Partner, Payments

The opportunities and evolution of the consumerization of B2B payments

  • B2B payments are slowly but surely following in the footsteps of consumer payments, becoming faster and more secure.
  • Visa, with solutions like Visa B2B Connect, is leading the way in streamlining cross-border transactions and improving efficiency, enhancing the business payment experience.
Darren Parslow, Visa | September 18, 2023

Payment data security requirements are set to change and organizations aren’t ready

  • Requirements concerning payment data security are set to change in 2024.
  • But companies in the payments ecosystem are not prepared to handle the overhaul these new mandates require.
Rabab Ahsan | September 15, 2023
More Articles