PayPal is expanding its lending services
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PayPal’s lending programme has already advanced more than $200 million of loans to individuals and small businesses. The FT reported that executives are planning to push the service as the company readies itself for next year’s spin off from parent company eBay.
The payment processor’s merchant lending service, which launched last September and has since made more than 35,000 loans at a maximum of $60,000, is modest compared to competing start-up lenders. The company has offered loans to consumers for some time, and announced plans to buy an existing loan portfolio from GE Capital for $1 billion earlier this year.
Unlike competing services, PayPal does not plan to make money from its lending service, but will use it as another way to lure merchants into using PayPal over rival payment processors.
PayPal will face some serious competition in the payments arena in 2015, where its slightly older systems make it difficult to innovate quickly – not a problem that new start-ups face. However the company has a loyal consumer and merchant base, both of which may benefit from an expansion in its lending services.