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PayPal Expands Consumer and Business Lending

There is no more Bill Me Later – not officially, that is. In what is bound to be a little confusing at first, eBay’s payments unit is rebranding the consumer-financing service Bill Me Later to “PayPal Credit.” The company is also expanding it to the UK and Germany.

Clearly eBay is enamored of the money-lending business. In the same announcement, PayPal said it was also expanding its service for online merchants, called PayPal Working Capital, to the UK and to Australia. The company did not address any differences in risk factors that geographic expansion might entail for the two services.

PayPal’s Senior Vice President of Global Financial Services & North America Gary Marino announced the news on the PayPal blog.

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Over 20,000 businesses have collectively borrowed more than $150 million in PayPal Working Capital business loans through its lending partner, WebBank, he revealed.

PayPal is similar to Kabbage, which was the first to capitalize on the power of online-selling data – including PayPal transaction data – in assessing the risk of lending to online merchants, many of whom use the working capital loans to finance inventory purchases or add more staff.

Marino said, “Offering these products more broadly is a sign of the power that credit brings to both merchants and consumers. Merchants can leverage credit as a tool to secure capital and grow their businesses. Additionally, they can offer credit with flexible payments options for their customers and immediate sales, while consumers experience freedom of choice when buying what they want – when they want it. We recognize this value isn’t limited to our US customers, so we are going global.”

He called the rebranding of Bill Me Later a natural and logical brand transformation. “It also demonstrates how we are moving credit more towards the center of our business, aligning it more closely with our overall brand, and working as a partner with businesses to spur growth.”

Amazon had been an investor in Bill Me Later before eBay acquired the company in 2008 for close to a billion dollars. Amazon also offers a lending program to its third-party merchants.

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Ina Steiner

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. Send news tips to ina@ecommercebytes.com.


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