PayPal is acquiring Swift Financial to enhance its Working Capital product, drawing upon the company’s technology platform, resources and the work it does with small business owners.
So far no details of PayPal’s acquisition of the lending firm have been disclosed.
The goal of the acquisition is to use the underwriting capabilities of Swift Financial to allow for more data to be processed when ascertaining the credit status of customers.
This is an area PayPal has been engaged in for some time, having launched its Working Capital product for supplying business loans in 2013.
PayPal’s activity in the space has so far involved it pumping $3 billion into over 110,000 small businesses. A central condition for receiving a PayPal loan is that the recipients must be users of its services so that credit can be accurately assessed.
Prior to this acquisition a loan could not exceed $125,000, but once bolstered and enhanced by the Swift Financial capabilities, as much as $500,000 could be available, spanning longer periods. PayPal may also be looking to outmanoeuvre more agile entrants to the increasingly crowded space.
Another recent move from PayPal was its agreement to work with Skype to provide users of the service to make payments to people within a Skype call. This new P2P initiative is set to be available to use across 22 countries.
Another deal the company made earlier this year was with Android, in doing so PayPal aims to gain a secure footing in the mobile wallet space, a territory that is hotly contested. This initiative will allow customers to use their PayPal balance with Android Pay.
The company has also enhanced its relationship with major investment banks including JPMorgan and Citi, intertwining its services with reward schemes offered by the banks for example. This move is also further widening the base of PayPal, and fintechs threaten its position increasingly.