Paypal Credit launches in the UK (PYPL)

Paypal credit launches in the UKPaypal credit launches in the UK

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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.

Evan Bakker and John Heggestuen, analysts at BI Intelligence, Business Insider’s premium research service, have compiled a detailed report on the payments ecosystem that drills into the industry to explain how a broad range of transactions are processed, including prepaid and store cards, as well as revealing which types of companies are in the best and worst position to capitalize on the latest industry trends.

368896817BI Intelligence

Here are some key takeaways from the report:

  • 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.
  • Alternative technologies could disrupt the processing ecosystem. Devices ranging from refrigerators to smartwatches now feature payment capabilities, which will spur changes in consumer payment behaviors. Likewise, blockchain technology, the protocol that underlies Bitcoin, could one day change how consumer card payments are verified.

In full, the report:

  • Uncovers the key themes and trends affecting the payments industry in 2016 and beyond.
  • Gives a detailed description of the stakeholders involved in a payment transaction, along with hardware and software providers.
  • Offers diagrams and infographics explaining how card transactions are processed and which players are involved in each step.
  • Provides charts on our latest forecasts, key company growth, survey results, and more.
  • Analyzes the alternative technologies, including blockchain, which could further disrupt the ecosystem.

To get your copy of this invaluable guide, choose one of these options:

  1. Subscribe to an ALL-ACCESS Membership with BI Intelligence and gain immediate access to this report AND over 100 other expertly researched deep-dive reports, subscriptions to all of our daily newsletters, and much more. >> START A MEMBERSHIP
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The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of the payments ecosystem.


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