Stripe's new lending platform can make the brand more competitive as it diversifies:
Working Capital, which allows merchants to apply for an interest-free loan of up to $200,000 that is then repaid as a flat fee plus a portion of daily sales, though it also comprises business financing. The service, which was launched in 2013, hit $10 billion in cumulative volume earlier this year, with 40% of that coming between November 2018 and May 2019. Square Capital, which was launched a year later, runs similarly and has$5 billion cumulatively.
Stripe's service could be a lucrative business line that, most notably, helps it retain clients. Business lending, particularly when it's done in partnership with a bank — which allows the payments provider to offload some of the risk — can provide both direct income through fees and also indirect gains: Businesses that take out loans typically see increases in sales, which in turn translates to more volume, and then revenue, for the payments provider.
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