The opportunity for payment companies
Payment companies — PSPs, payment facilitators, acquirers, and payment-adjacent platforms — have a structural advantage in serving SME business lending needs:
- Transaction data: card and payment data provides a real-time view of a merchant’s revenue and trading patterns
- Existing relationships: merchants who process payments through you already trust you with their financial infrastructure
- Natural touchpoint: the payment dashboard is where business owners already check their financial performance
Shopify Capital, Square Loans, and Stripe Capital have all demonstrated that payment data can power business lending at scale. But these are balance-sheet lenders — they lend their own money. For most payment companies, taking on lending risk is not an option.
The embedded broker model: how to offer lending without lending
The alternative is the embedded broker model:
- You integrate a regulated credit broker (like Fundably) into your platform
- Your merchants apply for funding within your platform
- The broker matches them to lenders from a 50+ panel
- Lenders fund the deals from their own balance sheet
- You earn revenue share — up to 30% per funded deal
No banking licence required. No lending risk. No capital requirement. No compliance overhead.
The broker (Fundably) holds the FCA authorisation and handles all regulated activity. You provide the distribution — your merchant base — and earn accordingly.
How payment companies differ from other platforms
Payment companies have unique advantages:
Transaction-based eligibility: merchants with sufficient payment volume can be pre-qualified automatically, without any manual credit assessment. The broker can present an indicative offer before the merchant even applies.
Real-time revenue verification: rather than asking for bank statements, the broker can use payment data to verify revenue in seconds. This dramatically speeds up underwriting.
Contextual placement: a “You’re pre-approved for up to £50,000” prompt inside a payments dashboard converts at a significantly higher rate than a generic funding widget.
Revenue potential for payment companies
At 30% revenue share per funded deal:
| Monthly active merchant volume | 1% apply for funding | 60% approval rate | Avg commission £2,000 | Monthly revenue |
|---|---|---|---|---|
| 5,000 merchants | 50 applicants | 30 funded | £2,000 | £60,000 |
| 20,000 merchants | 200 applicants | 120 funded | £2,000 | £240,000 |
| 100,000 merchants | 1,000 applicants | 600 funded | £2,000 | £1,200,000 |
These figures assume conservative application rates. Payment-led pre-qualification typically doubles or triples application rates versus cold prompts.
Integration
Payment company integrations typically use the REST API path, with payment transaction data passed as part of the Fundably application payload to support pre-qualification and data-accelerated underwriting.
For teams wanting faster deployment, the iFrame or React component can be live in under 48 hours — with the data enhancement added in a second phase.
What compliant embedding looks like
You are not advising merchants on credit products. You are integrating a regulated broker’s application flow. The key rules:
- Do not tell merchants which specific loan product to take
- Do not compare products or rates on behalf of merchants
- Do not assist merchants in completing applications
- Do present the funding option and hand off to the broker’s application flow