Payment company Square enters new markets by issuing business loans and will soon switch to consumer lending. The company's data collection and analysis algorithms determine creditworthiness, allowing borrowers to process their loans in a few taps.
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According to the WSJ article, one owner of the food truck from Texas accepted the offer of the loan application in the Square, and then took the 150'000 dollars to open a gastropub.
The borrower Billy Joe Wilson had already used the Square device for processing credit card payments for your business. Square's algorithms monitored transactions and tracked sales before allowing credit that Wilson accepted with a few taps in the Square app. Wilson received the funds within days.
FINTECH versus conventional banks
This event is a Prime example of how fast the FINTECH industry is moving, and an example of how companies like Square are starting to outpace conventional banks that have bogged down bureaucracy and technological backwardness, new business processes are flexible and match the pace expected by tech-savvy generations.
Noticing the gap in which small business owners struggled to prove their creditworthiness, Square Capital (Square Capital, a credit division of Square formed in 2013) issued more than $ 3.5 billion in business loans.
Square is currently transitioning to consumer lending, exploring ways to provide credit to seven million Square Cash app users. Any service provision here can use the same algorithms and machine learning to track user activity before making a credit decision. For business users of Square, a previous publication on Medium explains:
We can also use Square data and machine learning to help our sellers find the best Square products for their business. We have a team working using domain knowledge and feature development to predict the probability that the seller will be able to use any Square product package.
Square has also recently applied to open a Bank in the us, Utah, to offer business loans and Deposit accounts to businesses and consumers. With approval, the business will be classified as an" industrial credit company " that can operate without Federal reserve supervision, but will give Square the ability to offer Deposit accounts that are insured by the Federal government.
Another growing FINTECH startup, Robinhood, launched settlement and savings accounts with an interest rate of 3% this month, which immediately caught the attention of traditional banking organizations, as the accounts are not covered by the Federal Deposit insurance Corporation (FDIC), as we wrote earlier.
Square's new approach to the market is not limited to business and consumer lending. After adding the bitcoin buying feature to the Square Cash app, the app overtook Coinbase, The leading cryptocurrency exchange, and became the most popular iOS app to buy bitcoins (BTC). In addition, the app is now the best free mobile app on iOS in the US, demonstrating a growing user base.
Link to the source of information (Russian)
https://altstake.io/news/kripto-prilogheniesquare-nachinaet-vydachu-biznes-kreditov