According to the source, Australia and Britain are the first regions outside the US it is rolling out loans to. PayPal will make money by charging a one-off in advance fee, rather than interest. In October 2014, PayPal businesses are set to be invited to apply for funding online. If approved they will receive a “merchant cash advance” to their PayPal account. The business owner decides how much funding they need, up to about 8% of their yearly PayPal sales.
Repayments occur daily and the amount each day is chosen by the business, based on a percentage of their sales. Repayments will be made automatically, but no repayment will be made if the merchant has had no sales on that day.
In addition, the Braintree business PayPal has bought is now allowing it to provide “one-touch” payments.
Ride-sharing network Uber already uses Braintree to provide one-touch payments and Apple has a similar version in Apple Pay just released on its iPhone 6.
However, Apple Pay won’t be switched on in Australia until sometime in 2015, the source adds.
In recent news, Samsung has teamed up with PayPal to develop a mobile payments solution for smartwatch.
Every day we send out a free e-mail with the most important headlines of the last 24 hours.
Subscribe now