Technode<\/a>. This pledge is set to span over the next three years.<\/p>\nAnd Alipay isn\u2019t the only one. Square and Paysafe are among the companies that have made efforts to look beyond the traditional payments model to offer financial support \u2013 including lending \u2013 for their customer base.<\/p>\n
Even Grab \u2013 the Singapore-based ride-hailing app and payments provider \u2013 recently announced a new fintech platform and a supporting partnership with Credit Saison to form Grab Financial Services Asia. Grab Financial is slated to offer micro-financing within the Southeast Asian marketplace.<\/p>\n
For all of these companies, the ability to offer lending services gives them a competitive edge in the financial sector, particularly when traditional loans are difficult for small businesses to obtain. And when the payments company can also offer financial services, this can be a more comprehensive option for customers.<\/p>\n
But what about the challenges of incorporating payments and lending into a single business model? PaymentFacilitator spoke with the president of AZ Payments Group, Rick Oglesby, regarding the topic.<\/p>\n
\u201cPayments and lending have long been linked together,\u201d according to Oglesby. \u201cPayment providers are in the middle of the funds flow and they often intercede a very large percentage of their customers\u2019 revenue. It\u2019s like being a payroll provider, but for self-employed people.\u201d<\/p>\n
And this benefits the payments provider by enabling them to gain perspective on the customer\u2019s financial position and, potentially, control the flow of their funds, he said.<\/p>\n
As for challenges, Oglesby points out the most obvious one: \u201cThe core competencies of managing a payments business are different than managing a lending business.\u201d<\/p>\n
So where does the momentum to merge these two models come from?<\/p>\n
Ultimately, \u201cthe integration of software and payments has expanded the mindshare so that the payment processor (now often a hybrid of a software vendor and a payment processor operating as a payfac) has a much stronger ability to market lending to its customers,\u201d Oglesby said. \u201cIt also has a stronger ability to manage cross-business impacts through pre-approvals and more revenue diversity, which helps to manage risks.\u201d<\/p>\n
Deeper integration into the customer\u2019s day-to-day business also strengthens the customer relationship and makes selling other products easier, he said.<\/p>\n
Oglesby said he expects lending to expand among PF businesses. Even so, it won\u2019t be a good fit for everyone, Oglesby said.<\/p>\n
\u201cPFs offering business-critical software to their customers and that have access to payment data are in the best position. Large PFs may even get into direct lending. Most, however, should look for lending partners and operate as loan distributors and originators,\u201d he said.<\/p>\n
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As the payments ecosystem continues to evolve and the payment facilitator model continues to hold its own in both profit and demand, a long-time customer offering once considered banks\u2019 domain keeps making its way into the payments arena: Lending.<\/p>\n","protected":false},"author":21,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","_FSMCFIC_featured_image_caption":"","_FSMCFIC_featured_image_nocaption":"","_FSMCFIC_featured_image_hide":"","footnotes":""},"categories":[1023,1016],"tags":[35,70,363,480,663,828,877],"class_list":["post-4054","post","type-post","status-publish","format-standard","hentry","category-business-economics-learn","category-learn","tag-alipay","tag-az-payments","tag-grab","tag-lending","tag-paysafe","tag-square","tag-the-payment-facilitator-model"],"acf":[],"_links":{"self":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts\/4054","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/users\/21"}],"replies":[{"embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/comments?post=4054"}],"version-history":[{"count":4,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts\/4054\/revisions"}],"predecessor-version":[{"id":8238,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts\/4054\/revisions\/8238"}],"wp:attachment":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/media?parent=4054"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/categories?post=4054"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/tags?post=4054"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}