Amazon has debuted a cash advance solution for merchants selling on its site as small businesses seek more sources of growth capital.
According to a Tuesday (Nov. 1) news release sent to PYMNTS, the financing solution is provided by Parafin, a FinTech founded by veterans of Robinhood.
“This secure financing option ties payment on the cash advance to a portion of sellers’ future sales for a fixed capital fee and provides eligible Amazon sellers with easy and quick access to capital when they need it, paired with flexible payment plans,” the company said.
The program lets sellers access capital — anywhere from $500 to $10 million — in days with no credit checks or “excessive paperwork” and no late fees. It is launching Tuesday for some businesses in the U.S., and will become available to “hundreds of thousands” of sellers by early next year, Amazon said.
The program is open to sellers who have been selling on Amazon for at least three months.
Read more: Online Sellers Needing Capital Turn to FinTech Lenders Who Know the Terrain
Earlier this year, PYMNTS noted the changing landscape for online sellers trying to get financing in a conversation with Payability Co-founder and CEO Keith Smith.
“Five years ago, if you were an eCommerce seller, it was very, very difficult to be able to get financing,” Smith said. “You’re an online only business. That means banks and traditional finance companies aren’t going to be able to finance you, or even figure out how to be able to risk assess you.”
Considering that pandemic disruptions made it difficult for even major corporations to get access to capital the shock to marketplace entrepreneurs was far greater. However, the situation also created an opening for others.
“It’s difficult to find your footing at this point in time and figure out what is a normal [or] typical cycle, what is seasonality going to be for particular products this year, and not being able to necessarily compare to prior seasonality from the last couple of years,” Smith said. “It’s a bit of a challenge for us, and certainly challenging for our customers.”
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Standard Chartered Bank Hong Kong (SCBHK), Animoca Brands and HKT have agreed to form a joint venture to issue a stablecoin backed by the Hong Kong dollar.
The new joint venture intends to apply for a license from the Hong Kong Monetary Authority (HKMA) under a new regulatory regime, subject to the passage of the Stablecoins Bill, the companies said in a Monday (Feb. 17) press release.
Hong Kong’s stablecoin bill is under review and, if enacted, will require stablecoin issuers to obtain an HKMA license and comply with reserve and price stability requirements, Cointelegraph reported Monday.
The joint venture will benefit from Standard Chartered’s bank-grade infrastructure, rigorous governance and experience working with stablecoin issuers globally; Animoca Brands’ expertise and extensive network in the Web3 space; and HKT’s mobile wallet expertise, according to the companies’ press release.
The three companies have been working together in an HKMA stablecoin issuer sandbox that was launched in July to explore how stablecoins can play a role in the development of financial markets and payments, per the release.
Their joint venture’s Hong Kong dollar-backed stablecoin will be designed to enhance both domestic and cross-border payments and to serve both consumers and merchants, the release said.
“By leveraging the bank’s and our partners’ core strengths, we aim to launch a stablecoin that can be used securely by institutions and individuals across a wide range of use cases,” Mary Huen, CEO, Hong Kong and Greater China & North Asia, Standard Chartered, said in the release. “We are dedicated to staying at the forefront in driving FinTech innovation alongside the regulators, partners and clients, further consolidating the role of Hong Kong as an international finance center.”
In another, separate effort, Standard Chartered was among the firms that participated in a pilot project called the Canton Network that explored the potential of a privacy-enabled open blockchain network allowing for real-time settlement and immediate reconciliation across counterparty systems.
In September, the HKMA said that its second phase of testing had begun for its e-HKD Pilot, where 11 groups of firms are exploring tokenized assets, programmability and offline payments.