📉 PSP Bankruptcy: “Cash Flow Gaps” as a Common Mistake

📉 PSP Bankruptcy: “Cash Flow Gaps” as a Common Mistake

Many platforms have a terrible habit: they take funds from the merchants balance and spend the money on current operating expenses.

Why not? We’ll make profits with those funds anyway 🦷

But eventually, what’s known as a “cash flow gap” appears – and this usually signals only one thing: the money is gone. Even if it was not stolen intentionally.

The issue is often not malicious intent, but bad financial practice. Though for inexperienced people this may not be obvious – much like how an ordinary blue collar worker may not realize that blowing their nose into their own hand is a bad idea.

It is important to understand that this kind of bankruptcy is not a sudden catastrophe, but the moment of reckoning for previous bad spending decisions.

More money comes in from deposits > more money is invested into business expansion > projects grow > expenses increase ‼️ The company and its team begin living as if new wealth has already been created.

Owners launch long-term and risky projects, taking on unnecessary obligations.

Gradually, the illusion turns into a lifestyle. More employees, offices, cars, and partying – everything starts being built on the assumption that tomorrow there will be even more money. A moral habit of living beyond one’s means emerges: the very practice itself incentivizes bad decisions.

But sooner or later, reality catches up. Merchants are not with you forever, some projects will never pay off, and many perks were effectively prepaid borrowing from a future that may never come.

The business either collapses, or returns to harsh reality: belts tighten, staff gets cut, weak projects are shut down, and management relearns a simple truth – other people’s funds belong in segregated accounts.

And businesses grow sustainably through savings, productivity improvements, and living within their means.

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