Square expands business credit; Klarna gets a UK digital license | PaymentsSource

Square is looking to make it easier for small businesses in the United Kingdom to access capital with the launch of Square Cash Advance. 

Square says that its loan offering is set apart from traditional small-business lenders’ because the application process has less paperwork and the capital is delivered faster. 

“We know that the number-one reason small businesses fail in the U.K. is due to issues with cashflow,” said Samina Hussain-Letch, executive director of Square UK, in a statement. “This product takes that pressure away by providing our sellers with access to the funds they can use to run and unlock future growth in their business and be much better set up for success.”

Like Square’s other small-business loans, payment is taken from a portion of each sale the business makes, rather than on a standard repayment cycle. –Joey Pizzolato

Klarna gets clearance to expand in the UK

Swedish financial institution Klarna has received an electronic money institution license from the Financial Conduct Authority, enabling it to expand its range of financial services.

Klarna is well known outside of Sweden for its buy now/pay later lending, and will offer cash-back and account services in the U.K. via its new license. These products are already active in the European Union and the U.S, where Klarna is attempting to sell products beyond installment lending.

Klarna recently added retail banking services such as savings accounts in the U.S. and parts of Europe. The moves place Klarna in more direct deposit-gathering competition with banks in the U.S. and Europe. Klarna’s strategy got a boost earlier this year when it partnered with JPMorganChase to offer BNPL and other payment services to the bank’s customers.–John Adams  

Patrick T. Fallon/Bloomberg

Amex teams with Navan to issue virtual cards

Business travel and expense management firm Navan has integrated with American Express to enable companies to create virtual corporate cards on Navan’s platform. 

The cards can be used to book and pay for travel, with transactions fed into corporate travel and entertainment systems. Companies can tailor cards for specific needs or preset parameters based on corporate policies. Payment can be tracked and reconciled digitally, allowing regular updates instead of monthly expense reports. Financial institutions are adding technology to travel and entertainment payments as part of a pitch to corporate clients that are eager to cut expenses and improve control over budgets. 

U.S. Bank and PayPal are among firms that have added artificial intelligence to travel payments. PayPal, for example, is using agentic AI to automate parts of travel searches and bookings. —John Adams  

Mastercard expands virtual card processing globally

Like Amex’s Navan collaboration, Mastercard is expanding its virtual card strategy. Mastercard has enabled global availability of Mastercard Receivables Manager, a system that supports processing for virtual card payments. The card network also launched Commercial Direct Payments, which automates virtual card payments and reconciliation. 

Mastercard Receivables Manager initially launched in 2023 and this new update adds multi-language and new processing tools designed for international treasury finance and supply chain management. 

“Businesses today expect simple, secure and seamless ways to pay and get paid – with many turning to virtual cards to meet those expectations,” said Marc Pettican, global head of corporate solutions at Mastercard, in a release. Virtual cards have expanded in the past two years as demand for better control over corporate spending or procurement has increased. SAP, Visa and Circle are among the companies that have recently introduced or expanded virtual card programs. —John Adams  

Wise shareholders approve US stock move

U.K. fintech Wise’s plans for a primary listing in New York got a boost as the company’s shareholders voted to approve the move. Shareholders owning more than 90% of Wise’s class A stock and 85% of class B stock voted in favor of relisting in the U.K. That was more than the majority of both groups of shareholders and 75% of the stock’s overall ownership that needed to vote yes.

Wise in June first announced plans to establish a primary stock listing in the U.S. relegating the company’s London home base to secondary status. The company said the capital markets environment is better in the U.S. Wise’s plans come as  stablecoin issuer Circle’s initial public offering priced above the expected range in June, challenger bank Chime filed for an IPO in May. The fintech IPO market had cooled in the spring following President Donald Trump’s initial tariff announcements but has shown signs of improvement in recent weeks. —John Adams 

Revolut expands ‘adult financial services’ access

London-based challenger bank Revolut has extended most of the features it offers adult customers to 16- and 17-year-olds, in effect graduating them from its youth product, which will now be designed for 6- to 15-year-olds. This will give 16- and 17-year-olds access to direct deposits, foreign exchange and other services in the same manner as adults, with fewer or no parental controls over their activities.

The company is positioning this move as a way to establish financial relationships with younger consumers as they enter the job market for the first time, or prepare to leave home for advanced education.

Revolut has added a number of new products in the past year as it ramps up its super app strategy. The company recently partnered with Chinese digital firm Ant to support remittances to China. Revolut also recently launched new investment products in the U.K. and expanded credit in the U.S.

Revolut’s pipeline comes as PayPal and Block also add financial services to push a super app, or a platform for multiple financial and nonfinancial products, making these technology-focused companies a rival to banks, particularly for younger consumers. —John Adams

Standard Chartered teams with Alibaba on AI tech

Standard Chartered has partnered with Chinese e-commerce giant Alibaba to collaborate on artificial intelligence use cases for financial services. 

The two firms will develop AI-powered customer service and sales technology, and will also build training programs for internal staff on new forms of AI. This will cover how the technology works, compliance and safety issues. The training programs will include certifications. Standard Chartered will provide financial services to Alibaba Group, including financial support, supply chain products and cross-border payments.

The bank’s deal with Alibaba followed Standard Charter’s introduction of a ChatGPT tool for employees. —John Adams 

AI startup Catena adds legal expert to leadership

Catena Labs, a Boston-based startup that is building what it calls the first AI-native financial institution, has appointed Sharda Caro Del Castillo to be chief legal and business officer. Castillo has held positions at Affirm, Block, PayPal and Airbnb. She will manage legal issues for Catena, particularly pertaining to questions regarding agentic AI in financial services.

Sean Neville, one of Circle’s co-founders, founded Catena, which aims to provide financial services for AI agents and their human collaborators. Catena’s core product is a protocol and software development kit for agentic commerce. 

Agentic commerce refers to using new forms of AI to perform tasks with little or no human supervision. that includes customer service, product development, and some programming and risk management. Catena plans to use AI agents to manage financial transactions, which the startup says raises complex questions around licensing, identity, liability and compliance. —John Adams