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Case Study: Postmates

Here’s the story… 
 
In the early days of the on-demand industry, Postmates was founded in 2011 in San Francisco. They started out with the mission to become the on-demand delivery infrastructure for every major city in the world. Now they are transforming the way local goods move around a city by allowing anyone to get any product delivered in under one hour. Their innovative city logistics and on-demand delivery platform links customers with couriers, who purchase and deliver goods from hundreds of merchants in a participating city.
 
The challenge… 

When Postmates first launched, gift cards were purchased from local grocery and convenience stores. The cards had to be activated and loaded one by one and could not be reloaded. After that process, the cards were distributed to couriers to complete deliveries without ever receiving the customer’s details or access to their credit cards. This also was a solution that kept employees from using their own funds. By 2013, this company’s success was clear and their current system was not going to scale their business’ needs. The company’s rate of spend by customers grew by 6X from $130K in 2012 to $780K in 2013.

The goals…

Sean Plaice, Postmates’ Co-Founder and CTO, did some research and found PEX, which offered a turnkey employee spend management solution to be managed by businesses. The hope, at first, was that PEX would speed up the reimbursements and cut the process time in half. After a little time on the platform, Postmates asked about PEX’s free APIs, which were ready for use. The API allows the company to fund and defund cards, look at reporting and have data storage. The card funding is automated through the Postmates system. When a Postmates customer places an order, the company’s system triggers an API fund call to PEX. Funds are credited to a card. Post purchase, a job runs to clear balances from cards which helps limit and minimize fraud. Additionally, cards are assigned spend rules so cards can only be used at specific merchant categories.

The solution…

Through a technical integration between Postmates’ system and PEX, they are able to permit courier purchases ranging from a burrito to an iPad or anything from any local merchant. When a new courier is on-boarded, they are issued a PEX Visa® Prepaid Card to carry for the duration of their employment. As they are assigned orders, value is added to their card systematically to provide instant ability to purchase, but on a limited basis. 

The APIs PEX offer enable Postmates to handle card funding and to retrieve transaction detail at scale. The PEX Card is used to pay merchants for the items a Postmates courier is going to buy. The company is then able to retrieve purchase data for reconcilement.
 
The results…


“PEX has been great to work with and supportive of our needs as the company grows,” said Plaice.

The integration has been so successful that Postmates now has close to 40,000 cards. Since using PEX, the company has seen transactions happening at a rapid pace, processing nearly $20M a month through the PEX Visa Prepaid Card. In addition to the cards being used by the couriers, the customers now have a second account to track transactions as well.