PayPal has lent over a billion dollars to small businesses in America, Australia, and the UK, according to CEO Dan Schulman. He made the announcement during a keynote speech at this week’s Money20/20 conference.
The loans have gone to more than 60,000 small businesses through a PayPal division called Working Capital, which is aimed at providing smaller companies with an alternative means by which to access credit while avoiding the lengthy and cumbersome process that loan applications can sometimes entail. That’s facilitated through the relatively intimate relationship between PayPal and its debtors, who must be PayPal clients having processed over $20,000 over the course of at least 90 days. Meeting those conditions grants them access to major loans through an application process that can be as short as a few minutes in duration.
It’s another part of PayPal’s overall goal of leading the digital revolution sweeping over the financial services industry: What it gets in return for these loans, in addition to the usual benefits accorded to creditors, is an expansion of its ecosystem, with more merchants using its eCommerce services. It’s coming at this objective from a number of clever angles, including offering to cover shipping expenses on returned holiday gifts; and as the company delves deeper into the burgeoning mPayments market, this could be a means of getting many more small business to accept mobile payments via PayPal, should the company make such a push.
Source: CNBC
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