Square Just Made a Big Move Against Affirm

Square, which is run by Twitter’s CEO Jack Dorsey, is pushing into consumer lending by launching an installment payments service that allows customers of its small-business clients to pay for purchases in installments.

Through Square Installments, Square will extend credit to the customers of merchants that use its technology to accept payments online and in-store for purchases in the range of $250 and $10,000.

Those who use the service and borrow, will be able to repay in fixed payments each month over a period of either three, six, or twelve months. The interest rates will range between 0 and 24 percent and merchants will receive the payment upfront while Square will be holding the loans on its balance sheet.

This point-of-sale lending service provided by Square Capital, puts Square now up against companies like Affirm Inc. who provide similar forms of credit to its consumers.

Square has already been testing the installments service in a limited number of states for over a year.
“We built a tool, typically available to larger businesses, that helps sellers offer financing to their end customers,” Jacqueline Reses, head of Square Capital, stated.

“For the customers, it is an easy way to manage larger payments in such a way that you can have an easy fixed monthly payment.”

Disclaimer: We have no position in Square Inc. (NYSE: SQ) and have not been compensated for this article.