Market Value

There are 30 million small businesses in the United States, and they employ roughly 50% of the working population. Annually, they spend $100 billion in payment fees and an additional $144 billion on direct marketing. Globally there are 500 million small businesses, and it is estimated they pay around $450 billion annually in payments fees.

Non-cash transactions processed by banks exceed $410 trillion USD (more than 5x the world’s GDP); $2.2 trillion of that is paid in transaction fees, and the world spends $522 billion on advertising. Suffice it to say, no matter how you cut it up, this is a VERY large market. 

Target Market

We have two target markets:
1) Merchants
2) Users

Merchants
Out of the gate, our typical merchant will be entrepreneurial in nature. Examples are: food trucks, take-out restaurants, specialty stores, small main street stores, massage therapists, trainers, yoga studios etc. Generally, places where the owner is taking the payment, as it helps us remove adoption friction.

When we thought about launching a payment service, we decided to canvass over 400 small merchants across the U.S. to understand their pain-points and wish list. When it came to payments we found that high credit card rates infuriate merchants (to the point that we couldn’t get them past that topic). As for a wish list, merchants wished they understood social media better and could generate revenue from existing customers and attract new ones. Honey was designed precisely to meet these small merchant demands, and it’s worth noting (yet again) that free payments help small merchants pay for revenue generation.

Users
Only one-third of millennials have a credit card, and of those, only a few use them with any sort of regularity. The debit card reigns king for millennials. This generation prefers to “pay for what they consume” using money from their bank accounts, and research shows that they unequivocally LOVE deals. Out of the gate, we will concentrate on millennial and Gen Z early adaptors. ApplePay and Samsung plied convenience and a cool factor to get users, while Venmo used social media feeds and PayPal had a first mover advantage. We believe we give millennials and Gen Z what they want: deals, easy decisions, cool factor and flexible payment options.

Next Section: Competition

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