Stripe agreed to acquire Parafin, a lender that lets platforms such as DoorDash, Amazon, Gusto, and Jobber offer financing to the small businesses that use them, for an undisclosed price. Since launching in 2020, Parafin has funded over $3 billion for more than 60,000 US businesses. Stripe, which already lends through Stripe Capital and serves upward of 18,000 platforms, said the deal lets it offer more kinds of credit to a bigger pool of businesses, and IDC analyst Aaron Press told American Banker that owning the lender gives Stripe tighter control of risk, rates, and margins. Square and PayPal have long lent to merchants, approving loans off the sales they process and collecting repayment from them, with Square at more than $32 billion since 2014 and PayPal past $30 billion since 2013.
