Platforms use payments to underwrite loans
Matt Brown, Co-Founder of Bonsai, on the rise of vertical ERPs
Cheap payments are often a customer acquisition tool for much higher margin credit. Once a merchant runs payments inside Square or Shopify, those platforms can see daily sales, seasonality, refund rates, and payout timing, which lets them pre approve working capital and collect repayment automatically from future sales. That turns payments from a low margin utility into the data pipe and repayment rail for lending, payroll, and banking products.
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Square Loans uses a seller’s Square transaction history to underwrite offers and collect repayment as the business keeps processing through Square. Block has described loans as sized off expected annual GPV, which shows why keeping payment volume on platform matters far beyond processing fees.
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Shopify Capital works the same basic way. Eligible merchants receive offers inside Shopify admin, funding can arrive in as little as two business days, and repayment is tied to a percentage of daily sales. The tighter a merchant is to Shopify Payments and Shopify Balance, the easier it is to price risk and pull repayment.
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This is the core vertical ERP play. The software is not just where work happens, it is where cash enters, sits, and leaves. HoneyBook is following the same path by adding checking, cards, and money management on top of workflow software, because owning both workflow and cash flow expands monetization far beyond SaaS seats.
The next step is deeper bundling, where platforms use payment and balance data to decide who gets faster payouts, payroll smoothing, cards, or larger credit lines. The winners in vertical software will be the ones that control the merchant’s operating system for both jobs and money, because that gives them the cleanest underwriting signal and the lowest cost way to distribute financial products.