Thought Leaders in Financial Technology: Infinicept CEO Todd Ablowitz (Part 5)

Sramana Mitra: The lending trend is everywhere. I know that Square is offering small business financing. There are FinTech companies that are focused on giving loans.

Intuit, for instance, is offering both payment and financing. What other examples do you have of the small business financing being offered by payment processors?

Todd Ablowitz: Just about every traditional payment processor offers cash advance. You can look at every processor. However, the payment facilitators have done it a little better. You’re not looking at a loan at usurious rates.

The reason they’re able to do it at a much lower interest rate is that they’re using a lot of information. They have a better model to show how likely it is to get paid back.

Sramana Mitra: Aside from lending services, what other services are you seeing them offering that is relevant for this conversation?

Todd Ablowitz: We talked about instant funding. That’s a surprising percentage of Square’s revenue.

Sramana Mitra: What do you mean by instant funding? Isn’t that lending?

Todd Ablowitz: It’s a little different. Today, I take a thousand dollars of charges. That money is going to go into my bank account tomorrow or the next day. If I do instant funding with Square, I can press a button and Square will put that in my bank account in less than 30 minutes. I pay a fee for that. That’s discrete from lending.

I’m seeing some issuing of small business credit cards. I’m starting to see some of that. I think that there are certainly related functions like Point of Sale software and other business management software. You might combine your payment offering with an invoicing offering or an omnichannel offering.

You’re at the dentist and you pay for some part of the dental services today. Then you have a subscription where you have some other ongoing. That’s done remotely. But you learned about that card number from the face-to-face environment. That keeps extending to inventory and a more sophisticated online shopping experience. It just goes on and on endlessly.

Sramana Mitra: What’s happening in the other direction? There are a whole lot of small business software companies. Intuit, being number one in that category, has also started providing payment services.

Todd Ablowitz: Yes, Intuit has been doing payments for a long time. When you say other direction, are you looking for other Intuits?

Sramana Mitra: Yes. What else have you seen in the other direction of small business software companies offering payment services?

Todd Ablowitz: Freshbooks got an investment from JP Morgan. Zero offers payment. Zoho offers payment. There is Invoice2go. There are lots of those types of companies that are including payments in their offering. 

This segment is part 5 in the series : Thought Leaders in Financial Technology: Infinicept CEO Todd Ablowitz
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