Paypal credit launches in the UK
PayPal will begin offering its PayPal Credit product, which provides users with financing options at the time of purchase, to UK users, according to a company blog post.
Customers apply for PayPal Credit online, are assessed using PayPal’s proprietary credit scoring method, and if approved, are given a credit limit based on their score. They can then make purchases on credit anywhere that accepts PayPal. The platform has existed in pilot form in the UK since 2014.
PayPal is using promotional tools to attract users to the program. PayPal Credit will offer no interest for purchases above £150 ($212) for the first four months before it shifts to a standard rate of around 17.9%, according to TechCrunch.
And the platform is working out deals with major UK retailers to offer longer periods without interest or lower interest rates, according to Engadget. For context, in the US, PayPal Credit offers a zero-interest option for purchases above $99, and also gives users the option of a physical card.
PayPal Credit could take off quickly in the UK, which could bring strong benefits to PayPal.
- It’s likely that users are interested. In the US, 37% of users have used point-of-sale financing and 25% expect retailers to offer it. And though that data focuses on financing for in-store purchases, it’s likely it would translate to online shopping as well. That means that, if PayPal can overcome UK users’ wariness to pay with credit, it’s likely there’s an interested user base for the service.
- The launch also helps PayPal bolster its international presence, which PayPal has been working to do since splitting from eBay. And the UK is a common first stop after the US for the firm to test new services. Launching Credit in the UK will help PayPal strengthen its presence there while giving itself a base to test the service before potentially pushing it into the rest of Europe.
It’s clear that the way we move money is changing dramatically. For example, people are beginning to use their smartphones for every kind of formal and informal transaction — to shop at stores, buy songs online, and even split their rent.
At the heart of these changes in how we pay are thousands of companies competing and collaborating to facilitate transactions.
To understand why the payments industry has faced so much disruption in such a short time, there’s just one key thing to understand: Payments is about transferring information from one party to another, and nearly every stakeholder in the industry benefits when that process runs on digital rails.
But payments is also an extremely complex industry that few fully understand.
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- 2016 will be a watershed year for the payments industry. Payments companies are improving security, expanding their mobile offerings, and building commerce capabilities that will give consumers a more compelling reason to make purchases using digital devices.
- Payments is an extremely complex industry. To understand the next big digital opportunity lies, it’s critical to understand how the traditional credit- and debit-processing chain works and what roles acquirers, processors, issuing banks, card networks, independent sales organizations, gateways, and software and hardware providers play.
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- Analyzes the alternative technologies, including blockchain, which could further disrupt the ecosystem.
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