Pipe, a fintech company, has announced the launch of the Pipe Business Card, an embedded business card for software and payments companies in the U.S. The card is designed to provide small and medium-sized businesses (SMBs) with access to capital and financial tools. The Pipe Business Card is a charge card that provides an extension of working capital, which must be paid in full at the end of each billing cycle. It is particularly suitable for physical retail outlets such as nail salons, hair salons, spas, and coffee shops.
Issued by First Internet Bank, the card is a pay-in-full product, with balances required to be settled within 15 days of the statement closing date. Customers can draw down money from a line of credit to pay the balance, although the Pipe Business Card is not a traditional revolving credit card. Pipe’s SaaS partners can benefit from these embedded card programs without managing underwriting or credit risk.
By partnering with software companies that have long-term relationships with small business customers, Pipe can provide real transaction data that de-risks card issuance and capital allocation. The programs can be implemented in a matter of days. The Pipe Business Card offers 1.5% cash back and has no annual fees.
Business card for SMBs launched
According to Luke Voiles, CEO of Pipe, the profitability of the card comes from interchange fees rather than making it a massive profit center. Voiles explained that if a customer doesn’t pay off the card in time, the account is locked, and a percentage of daily sales is used to reduce the balance until the card is fully paid.
Pipe creates bespoke models for each partner, leveraging extensive data and history to improve underwriting efforts. Additional features set to roll out include spend management solutions that integrate with accounting and billing systems, reducing the manual tasks of running a business. This allows business owners to focus on strategy and opportunities, which is an important function of the Pipe charge card.
Furthermore, Pipe is preparing to launch an AI-driven CFO product within the next month. This tool will use industry-specific data to provide SMB owners with insights into industry benchmarks, revenue trends, and create forecasts. Automated payroll functions driven by AI are also expected in the near future.
Voiles hinted at the possibility of future partnerships with financial institutions to create referral networks, further enhancing the embedded ecosystems offering critical support to SMBs. “Our goal is to solve all of these problems… one industry at a time,” Voiles stated.
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