Stripe may counter PayPal and Square with cash advances
A week after revealing its Stripe Terminal as a way to enter the physical retail space, the online payments provider plans to add financial support through cash advances to the services it provides merchant clients.
Stripe has been testing a product called Advance with its customers, offering loans that are approved in one to two days after a merchant applies, according to technology site TechCrunch. Stripe did not respond to inquiries to provide more details on Advance or confirm its testing.
Merchant cash advances for small businesses became more common during the recession triggered in 2008, and it resulted in a competitive field offering this type of aid to clients.
While that sort of advancement has attracted regulatory scrutiny, it has not stopped major players like Square to establish Square Capital and others in payments to establish successful programs for their clients.
PayPal delivers cash flow aid to its clients through PayPal Credit, a loan program that offers installment payments at the point of sale. PayPal entered the loan arena after acquiring Bill Me Later in 2008 and has recently moved to allow Synchrony Financial to acquire its consumer loan portfolio.