Categories: B2B Payments

Kabbage Steps Into SMB Payment Processing

Alternative small business (SMB) lending company Kabbage is entering the payments space in an effort to support small business cash flow.

The company announced the launch of Kabbage Payments on Thursday (Oct. 24), a payment processing tool for small businesses to support faster invoice payments and accelerate accounts receivable. Small business customers can generate a unique URL to provide customers with a link to send card payments via text, email or web.

Kabbage said the solution negates the need for a small business owner to generate individual accounts, open new payment orders or duplicate documents for recurring invoices sent out to customers.

In addition to payments processing, Kabbage Payments is able to generate, send and manage invoices, with small businesses able to access funds paid on those invoices within 24 hours. Small businesses are charged 2.9 percent plus a $0.25 fee per card payment, while cash and check payments can be received for free.

“Since 2011, we’ve helped hundreds of thousands of small businesses access over $8 billion in funding,” said Kabbage CEO Rob Frohwein in a statement. “We know first-hand a primary need is to cover cash-flow gaps while waiting to be paid. Kabbage Payments not only expands our suite of products, but the very definition of our company. We believe in the mission of small businesses and understand what they need to succeed — namely more time building their businesses and less time worrying about cash flow.”

Kabbage is planning for a widespread rollout of Kabbage Payments to SMB customers “soon,” with business owners able to request early access.

The company first announced plans for a payment processing service in May of 2018, a move reports at the time said would position the company directly in competition with Square and PayPal.

Earlier this year Kabbage released research that highlighted the cash flow challenges of small businesses, with 26 percent of SMB owners surveyed reporting that they have gone two to six months without paying themselves.

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The PYMNTS Cross-Border Merchant Friction Index analyzes the key friction points experienced by consumers browsing, shopping and paying for purchases on international eCommerce sites. PYMNTS examined the checkout processes of 266 B2B and B2C eCommerce sites across 12 industries and operating from locations across Europe and the United States to provide a comprehensive overview of their checkout offerings.

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