How PayPal wants to fill the banking deserts for VSEs/SMEs



The online payment service PayPal has just launched a financing solution to attract French VSEs and SMEs. The opportunity to take stock with its managing director France, Francis Barel.

We no longer present PayPal, the online payment system created in 1998 and which now claims 430 million active accounts worldwide. France has become its fourth largest market, after the United States, the United Kingdom and Germany, with 14 million users. “It is a market where we innovate“, explains Francis Barel, its Managing Director France, in particular with the launch of Peer to Peer, split payment and more recently with a financing system for VSEs and SMEs.

The objective is to support VSEs and SMEs in their growth with a loan of between 1,000 and 130,000 euros for the first loan and 160,000 euros afterwards.“, specifies Francis Barel. The system is intended to be relatively simple, since PayPal will reimburse itself on payment volumes and “it is the company that decides whether it wants to reimburse between 10 and 30% of its turnover on PayPal on each transaction”. A system of fixed fees which, according to the American service, costs less than a traditional loan with a fixed interest rate, but which according to the regulator may represent an excessive rate.

To benefit from it, you must have three months of seniority at PayPal and make more than 12,000 euros in turnover per year. “The goal is to make it very easy“, insists Francis Barel.

The panel of offers is also open to payment terminals, in particular with Zettle, a terminal attached to a smartphone, and split payments free of charge. Is PayPal trying to pull the rug out from under traditional banks? “The objective is to supplement the banks“, recognizes the Director General France, by filling what he calls the “banking deserts“French language that VSEs and SMEs in the regions sometimes have to overcome.

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PayPal is gradually investing in the world of cryptocurrencies

PayPal has also entered the world of cryptocurrencies with the “Checkout with crypto” cryptocurrency payment system, available in the United States since 2021, and also allowing the British to buy cryptocurrencies and to store them in their account. These services are not yet available in France, but Francis Barel ensures that PayPal is studying the possibility of extending them to all countries.

There remains the question of the general health of PayPal. The latest results communicated were less good in the 4th quarter of 2021 than at the start of the year. The payment service has benefited from the health crisis of recent months to take off. But the break with eBay in June 2021 hurt the payment service, which historically was very attached to the online sales site (same group from 2002 to 2015). EBay has indeed decided to no longer offer PayPal as a payment solution to its customers. According to the group’s CEO, this cut its turnover by around $1.4 billion in 2021. PayPal’s stock price reflects investors’ questions about the company’s financial forecasts. The stock rose from $80 to $300 between March 2020 and July 2021 before falling back to $80 this year. For Francis Barel, one should not give too much importance to the short term and project oneself into the innovations of tomorrow: we know that the priorities of investors are not always compatible with the long term…

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