PayPal Drops Bill Me Later, Adds Credit

PayPal is dropping the Bill Me Later service and rebranding it as PayPal Credit, which is meant to better complement the company’s new PayPal Working Capital service. Looking at a more global audience, PayPal is moving into financial sectors never before explored by the company.

PayPal Credit will soon be seen in the United Kingdom and Germany, Tech Crunch reports. The new PayPal Working Capital service, which offers business loans, is rolling out in the U.K. and Australia.

Credit has become very important to the online money mover, as both business credit offers to help PayPal-enabled businesses expand coincide with the consumer side, where PayPal Credit (formerly Bill Me Later) raises consumer spending with those businesses. PayPal VP of Credit Steve Allocca notes that spending goes up about 30 percent after a consumer adopts a PayPal credit option, which have previously been offered as either the Bill Me Later service or a GE-backed PayPal credit card.

Bill Me Later was itself a credit system acquired by PayPal through a merger back in 2007. Then-PayPal President David Marcus envisioned moving the company into credit services, according to press reports from the acquisition. PayPal foresees the offering adding more services like monthly payment processing and an integration of the service, which currently stands alone, with the PayPal Wallet ecosystem.

On the business side with the PayPal Working Capital service, PayPal is aiming to make getting lines of credit for businesses who use its service. Further, reports Venture Beat, PayPal is increasing the lending limit for Working Capital loans to $60,000 (up from $20,000) while simultaneously doubling the amount of eligible merchants for the credit line. Although the PayPal program is invite-only, PayPal manages the loans itself through its partnership with WebBank.

The moves are in line with trends today. PayPal’s entry into small business lending, in particular, coincides with changes in the market. According to the Small Business Administration, small business is about 99.7 percent of all active firms, and two-thirds of new jobs created in the past 20 years were in those small businesses.

Alternative lending products have become popular among small businesses since the 2008 financial crisis knocked many businesses out of traditional bank loan eligibility. PayPal is entering the fray against well-funded, but not as well-known, alternative lenders like OnDeck Capital and Kabbage. Against them, PayPal has the advantage of already not only being well-known by small businesses, but also of likely being a part of their current transaction repertoire.

All of these announcements come about a month after PayPal President David Marcus left for Facebook, leaving PayPal without a leader as current eBay CEO John Donahoe temporarily mans the helm as they search for a new PayPal president.