PayPal to Expand Lending Offering With Acquisition

Advertisement
By Reuters | Updated: 11 August 2017 09:47 IST
Highlights
  • Acquisition will allow PayPal to offer loans to the larger businesses
  • Swift Financial extends credit to businesses through loans and advances
  • PayPal has lent more than $3 billion to 115,000 small businesses
PayPal to Expand Lending Offering With Acquisition

Payments firm PayPal has agreed to acquire online lending company Swift Financial in a bid to expand its business that provides working capital to merchants.

The acquisition will allow PayPal to offer loans to the larger businesses that process payments through its platform and better provide credit to firms that are not yet users of its services, the company said on Thursday.

San Jose, California-based PayPal did not disclose terms of the deal, which is subject to regulatory approval.

Founded in 2006, Delaware-based Swift Financial extends credit to businesses through loans and advances.

Advertisement

PayPal has been offering short-term loans to its smaller merchants through a division called PayPal Working Capital since 2013. It uses data on the payments it processes for its merchants to assess their credit-worthiness.

The company has lent more than $3 billion (roughly Rs. 19,260 crores) to 115,000 small businesses in loans of up to $125,000 since inception.

Advertisement

The deal will enable PayPal to start offering term loans of up to $500,000 to its larger merchants and take advantage of Swift Financial's data capabilities to lend to companies that may not be long-time users of its services.

"This is an area where customers have been asking for more," Darrell Esch, vice president and commercial officer of global credit at PayPal, said in an interview.

Advertisement

Since breaking off from eBay in 2015, PayPal has been expanding partnerships and acquiring new services to gain advantage over rivals in a highly competitive digital payments market.

Online lending, which took off after banks retreated from offering loans to small businesses and consumers in the wake of the 2007-2009 financial crisis, takes advantage of digital technologies to offer loans at lower costs.

Online lenders say they are better at servicing new types of e-commerce companies because their business models may not fit the established underwriting parameters used by traditional financial institutions such as banks.

Linda Lightman, chief executive of an online luxury consignment business she started from her home 17 years ago and a long-time PayPal user, secured a loan from it in June as the payments company launched its first loan product for larger businesses with Swift Financial.

"With a bank it is a much more elongated experience," Lightman told Reuters. "For PayPal it was a day. They understand our business to begin with."

© Thomson Reuters 2017

 

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.

Advertisement

Related Stories

Popular Mobile Brands
  1. OTT Releases This Week: Kaalidhar Laapata, Thug Life, The Good Wife, and More
  2. Here's How Much the Vivo X Fold 5 and Vivo X200 FE Might Cost in India
  3. Tecno Pova 7 5G, Pova 7 Pro 5G Launched in India: Price, Availability
  4. Oppo Reno 14 Pro First Impressions
  5. Tecno Spark 40 Pro+, Spark 40 Pro and Spark 40 Launched: All Details
  6. The Good Wife OTT Release Date: When and Where to Watch it Online?
  7. Google to Offer $100 Cash or $150 Store Credit for Pixel 6a Trade-Ins
  8. iPhone 17 Pro Max Tipped to Get a Battery Upgrade Over Its Predecessor
  9. Tecno Pova 7 5G Series Launching Today: All You Need to Know
  10. These Are the Best AI Image Generators to Use in 2025: Check Details
  1. Tecno Pova 7 5G, Pova 7 Pro 5G Launched in India With MediaTek Dimensity 7300 Ultimate SoC
  2. Google Pixel 6a Owners Eligible for $100 Cash or $150 Store Credit Under Battery Performance Programme
  3. Meta AI Chatbots Will Soon Send Users Proactive Follow-Up Messages to Boost Engagement: Report
  4. Android 16’s Live Updates to Show Active Navigation, Ongoing Phone Calls, and More on Lock Screen
  5. Helldivers 2 is Coming to Xbox Series S/X Next Month, Pre-Orders Now Live
  6. Vivo X Fold 5, Vivo X200 FE Price in India Leaked Ahead of Debut on July 14
  7. Samsung Galaxy Z Fold 7 Design Spotted in Leaked Hands-On Images Ahead of July 9 Launch
  8. iPhone 17 Pro Max Could Get a Battery Upgrade Over Its Predecessor; May ‘Reach’ 5,000mAh Capacity
  9. Apple MacBook Pro With M5 Chip to Launch This Year; 15 Mac Computers in Development: Report
  10. Tecno Pova 7 5G Series Launching Today: Expected Features and Specifications
Gadgets 360 is available in
Download Our Apps
Available in Hindi
© Copyright Red Pixels Ventures Limited 2025. All rights reserved.