Zipremit is planning a service that will enable merchants to accept payments and extend credit to consumers who don't want to use a credit card account.

"We're looking to make it easier for small to medium sized businesses to facilitate e-commerce and reduce interchange costs," says Andrew Ling, the founder and CEO of the Scottsdale, Az.-based Zipremit, during an interview at the Cartes America conference this week in Las Vegas.

Zipremit, which expects to launch over the next few weeks, will process mobile or Web payments and facilitate microloans that merchants can offer to consumers. The company is working with a financial institution that Ling would not name to process the loans and handle compliance. Zipremit is a competitive play against credit cards, as well as services such as PayPal's BillMeLater.

The company did not disclose its fee structure for handling payments or loans, but Ling says it will be competitive with or undercut credit card interchange fees. "The merchant can offer another alternative to a credit card," Ling says. Zipremit would share interest payment revenue with the loan processor.

The company's service will be offered on a white label basis. Merchants will brand their payments and financing service, and Zipremit will leverage hosted technology to process transactions on the back end.

"Merchants can have the option to extend credit to their customers to build loyalty and relationships," Ling says.

Use cases could include a hotel enabling a guest to extend a stay, or a vet helping a pet owner finance an animal's care, Ling says. The loans would be between $500 and $5,000, and Zipremit would accept payments on behalf of the merchant and loan processor. "We sort of sit between the merchant, the consumer and the bank," Ling says. 

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