PayPal Begins Financing Online Merchants

PayPal is beginning to finance online merchants who sell through eBay, a company spokesperson revealed to Reuters.

According to the source, PayPal has already tested a financing program for eBay sellers in the U.K. and plans a similar trial with U.S. Merchants later in 2013. For the U.K. program, PayPal teamed up with United Kapital to offer select merchants advances of up to 25,000 pounds to spend on their businesses. The size of each company’s advance was determined by its PayPal sales, and all advances were paid into PayPal merchant accounts. Merchants were charged a fee based on their credit risk.

Gary Marino, senior vice president, global financial services at PayPal, hinted at the coming U.S. trial during eBay’s investor day in late March.

“Marketplaces is a great innovation lab for us to test new experiences,” Marino said. “We’ve done it successfully with credit and we are experimenting with many new capabilities which will drive share like small business lending.”

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