Fintech firms are now competing on capital as a service. Innovators such as Kabbage, Clearbanc, Square Capital, and others are stepping in to provide capital in a more flexible manner to an increasing level of emerging small businesses. Stripe just improved its capital as service business by simplifying the process.
The company announced on September 5th, 2019:
Stripe is a finance and technology company that resides in San Francisco, California. The fintech firm started out by making life easier for people and businesses to send and capture payments over the Internet. It was founded in 2009 and is still a private company. The company provides a full service package that includes the technical infrastructure, and an overall processing infrastructure for banking.
The company has a significant ambition of becoming the foundation for the growing number of e-commerce and internet related businesses across the globe. A crucial component of being a key facilitator in this new world of e-commerce and internet based commerce.
One key issue that Stripe aims to resolve is that of access to capital. Lending requirements by traditional banks are more stringent for emerging businesses and more than 50% of growing businesses lack the funds that they need to become a more impact oriented entity. Additionally, companies don’t want to continue to spend a large portion of their time on traditional processes such as filling out paperwork, hoping for a potential capital opportunity.
Stripe streamlines the capital process by making it simple, convenient, data-driven and tied to the success of the business. Finally, business to business platforms that are Stripe focused will also be powered by Stripe Capital via Stripe Connect, allowing them to deploy capital to entities on their platform.
The fintech firm is certainly taking the right steps to be a foundational player in the growing e-commerce sector.
The initiative will be US based for now.
On demand capital in DeFi is based through collateral, namely DAI, place 150% of ETH collateral into a smart contract via argent, Wallet connect, or some other platform and receive a DAI loan to meet your financing needs. Of course, the problem with DAI is the exorbitant lending rates a borrow incurs when conducting the transaction. The second issue might be that of the collateral itself, how many growing businesses (in this context) would want to purchase volatile assets and pledge that as collateral for a loan to run and improve their business?
It seems to me that capital as a service would be a fantastic problem for DeFi to solve.
– This article was originally posted at CryptoTraderNews
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