PayPal Credit: A Strategic Rebranding and Global Expansion
In a strategic move to strengthen its financial services ecosystem, PayPal has announced the rebranding of its Bill Me Later service to PayPal Credit. This change aligns with the company’s broader vision to position credit products at the core of its offerings while expanding internationally.
Key Developments in PayPal’s Credit Strategy
- Rebranding Initiative: The transition from Bill Me Later to PayPal Credit streamlines the service under PayPal’s unified brand identity.
- Global Expansion: PayPal Credit will launch in the U.K. and Germany, while PayPal Working Capital (its business loan service) expands to the U.K. and Australia.
- Increased Functionality: The revamped service will integrate deeper into PayPal Wallet, reducing friction for users and enabling features like flexible monthly payments.
Why Credit Matters to PayPal
According to Steve Allocca, PayPal’s VP of Credit, credit products drive significant engagement:
- 30% increase in customer spending after adopting PayPal credit options.
- Millions of active users across PayPal Credit and Working Capital combined.
- Long-term strategy: Credit services support PayPal’s ambitions in mobile payments and offline point-of-sale transactions.
“Credit is especially important as we expand into the offline world and omnichannel commerce,” Allocca emphasized. “It gives us more tools to manage transaction economics effectively.”
The Future of PayPal Credit
- Portfolio Acquisition: PayPal plans to acquire GE’s $1B credit portfolio by 2016, further consolidating its credit offerings.
- Retail Integration: Future plans include expanding PayPal Credit to physical retail environments, though this remains a secondary focus for now.
PayPal Working Capital: Fueling Small Businesses
Since its pilot launch in 2013, PayPal Working Capital has:
- Lent $150M+ to 20,000+ businesses.
- Reached a lending rate of $1M per day, with 60% of loans going to eBay sellers.
Unlike traditional lenders, PayPal leverages its internal transaction data to offer instant, tailored loan approvals—a competitive edge in the crowded fintech space.
The Competitive Landscape
PayPal operates in a dynamic market with players like:
- Funding Circle
- Kabbage
- Lending Club
However, Darrell Esch, VP of SMB Lending at PayPal, notes:
“We’re not just a credit provider—we’re a commerce company first. Our solutions are deeply integrated with our users’ business workflows.”
Looking Ahead
This rebranding and expansion signal PayPal’s commitment to becoming a full-spectrum financial platform, blending seamless payments with flexible credit solutions for consumers and businesses worldwide.
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