eBay Shows Ambitions on SME Lending Sector
Short after they selected Adyen as prime partner for processing their transactions, former PayPal parent company announces another strategic partnership with the SME lending company Square Capital, to add credit offers for their sellers.
As of Q3 2018, eBay’s sellers seeking to grow their commercial activity, will be able to apply for loans ranging from 500 to 100,000 dollars in just a few clicks.
The credit decisioning process is based on an algorithm, and doesn’t require that actual application documents be sent. This tool analyses data made available via the merchant’s eBay account to assess his eligibility. Selected merchants are sent an e-mail invitation. The offer is then displayed in the eBay interface, as already proposed by PayPal for their e-merchants.
Just like Square’s e-lending offer in the US, the repayment process relies on preset amounts taken from their future sales. This option is only available in the US for now.
Comments – eBay Inspired by PayPal’s successful credit offer for e-merchants
Considering their popularity, eBay tries to secure e-merchants' loyalty through adding credit offers. This launch is in line with a larger transition plan to unfold until 2021. It might allow them to make further profit while challenging FinTechs and new entrants. eBay is also looking into other payment options: in fact, on the same occasion, they announced a partnership with Apple Pay, too. This service will be available for purchases on their website and mobile app starting this fall.
This trend is gaining momentum: payment industry players increasingly aim for the SME lending market, and e-merchants are choice targets. They also try to improve the way they handle data analytics. Before eBay, yet another e-commerce company, Jeff Bezos, started featuring credit offers for small businesses. Jeff Bezos went for Amazon Lending to make it easier for merchants to apply for a credit line. Also, eBay’s former subsidiary introduced cash advance services for SMEs through their PayPal Working Capital program as early as in 2013.