Block on Thursday said it secured approval from the Federal Deposit Insurance Corporation to originate loans through its banking subsidiary, Square Financial Services, allowing it to offer small-dollar consumer loans directly rather than relying on external banking partners. It's an expansion of Cash App Borrow, the company's short-term lending product.
Block, Affirm and PayPal are each bolstering their portfolios of financial products, including debit, lending and payment offerings, as they try to capture more consumer attention and spending. Klarna will have to compete on price, with attractive rates and incentives, to keep up with the competition.