Online lender Kabbage to launch payment services by year-end
NEW YORK (Reuters) – Kabbage Inc, a U.S. online lender for small businesses, plans to launch payment processing services by year-end, President Kathryn Petralia said on Monday, helping it to diversify and compete more directly with industry leaders PayPal Holdings Inc (PYPL.O) and Square Inc (SQ.N).
The Atlanta-based startup will offer tools to enable clients, mostly brick-and-mortar businesses, to accept card payments in-store and online, Petralia said in an interview.
“The monoline businesses have a hard time succeeding long term,” Petralia said, adding that Kabbage hopes the move would deepen its relationship with customers.
“We have seen a huge pain point around cash flow management,” she added, citing high monthly fees and lengthy contracts of payment services by other providers.
Launched in 2009, Kabbage is among a group of startups that use digital technologies to lower lending costs and offer credit faster than large banks.
Kabbage can help companies avoid lengthy credit card reader application processes because it already has information on their business, Petralia said.
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