In the current scenario, all those instacarts, eat24s, etc are also looking to get paid first, so this advantage should evaporate (leaving only those which are systemic -- ie banks, processors, etc).
Example: Suppose I am in a "Buy things for $50, sell them for $60" like Magic is. Day 0 is the transaction day. I buy the good/service for $50 on my Amex and capture a $60 transaction from the end-user using Stripe. Stripe sends me 97% of $60 on day 2. It arrives in my bank account on day 5. My next Amex statement is, probabilistically, issued on day 15, and includes the $50 I spent to service my customer. On day 22, I instruct my bank to transfer Amex $50. (We'll ignore the relevant detail that I'm generating cash rewards from Amex up the wazoo once I hit scale.)
In addition to $8.20 or so of revenue I've also had ~17 days of use of someone else's $58.20.
Might as well give two examples of how it looks like with different business models:
+ SaaS is often cash-flow negative if you're doing month-to-month billing, since cost of customer acquisition (marketing spend + sales commission) is routinely 4~8 months of billings. If you increase MRR by $100k in a month you're doing great, unless you don't have $500k in the bank account, in which case you just bankrupted yourself.
+ E-commerce: If you're in a model where you actually hold inventory, it is very possible to need to pre-purchase a large amount of inventory in advance, occasionally on non-favorable credit terms (like e.g. cash before delivery), prior to being able to sell it. Many of the great e-commerce businesses are built on various hacks which flip this cash flow cycle around. Amazon, for example, was famous for (ab-)using traditionally prevailing payment terms in book publishing which are hilariously in the favor of retailers ("We'll just give you free inventory and only ask you for money if you sell it." "OK. Tell you what, how about we sell it, only then even take delivery, and then pay you." "My, you tech people sure don't understand how this game works. OK, sounds great.") -- that's one of the reasons they picked books as their first base of operations.
http://blog.mbaco.com/importance-of-a-good-working-capital-m...