This is what makes capital markets work in the long run. A naïve lender treats all borrowers similarly. A new entrant, with better data or analytics, is able to discern a quality gradient amongst the borrowers.

This new entrant can now offer loans to the higher quality borrowers at a better rate. That makes it easier for sound businesses to borrow cheaply. The new entrant can also discriminate against riskier borrowers with a higher rate. That protects capital and makes the system sturdier.

Adding information, the way Square seems to be doing, to a financial process is sound economics. This is not the stuff of gimmicks.