Small business-focused digital lender Kabbage Inc. launched a payment processing business segment.
Using the new payment solution, called Kabbage Payments, customers can create a unique URL for their business and send payment requests through texts, email or online. That custom pay link eliminates the need to manually create new accounts, open new payment orders and duplicate work for recurring invoices, the company said.
Small-business lending was ripe for disruption following the 2008 financial crisis, when banks pulled back on issuing small-business loans. That gave way to digital lenders like Kabbage and On Deck Capital Inc. In September, payments processor Stripe Inc. also announced its entrance into the small-business lending industry.
Meanwhile, Atlanta-based Kabbage has long-discussed diversifying beyond small business lending. In an interview with S&P Global Market Intelligence in May 2018, co-founder and CEO Rob Frohwein said he was looking to help the cash flow of a small business. The private company already offers its customers a debit card that links to their available loan fund.
The feature is being rolled out after a successful beta program and is the first of several new products that will launch in the coming months to help small businesses manage their cash flow. Kabbage Payments also includes fee-free, online invoicing and next-day deposits.