PayPal Holdings, Inc. (NASDAQ: PYPL) has announced that they will acquire a lending company called Swift Financial in a bid to expand their business that provides working capital to merchants. The company will be able to offer loans to larger businesses that process payments through their platform and will also provide credit to firms that are not yet PayPal users.
Since 2013, the payments firm has been offering short term loans to their smaller merchants through a division called PayPal Working Capital. They would use data on the payments they process for their merchants to be bale to assess their credit worthiness. More than $3 billion was given out to 115,000 small businesses with $125,000 in loans.
This deal with Swift Financial will allow PayPal to start offering term loans of up to $500,000 to their bigger merchants and will be able to take advantage of Swift Financial’s capabilities to lend to companies that may not be long term users of their services.
PayPal has been acquiring new services and expanding partnerships to gain advantage over competitors in a very aggressive digital payments market ever since their break off from eBay Inc. in 2015.