PayPal funds UK SMEs with £185m » SMEInsider

PayPal funds UK SMEs with £185m

E-payments giant PayPal announced this week that it had successfully funded 14,000 UK SMEs with a total of £185 million since November 2014. And in a move designed to increase the company’s market share of the SME lending space, PayPal has announced it plans to raise the funding limit to £60,000. That figure contributes to the sum of over $2bn (£1.55bn) advanced to SMEs globally since the launch in 2013.

Nicola Longfield, director, small and medium business – UK & Ireland, said of the news, “Small businesses play a crucial role in powering the UK economy – last year small businesses accounted for 99.3% of all private sector business, with a combined annual turnover of £1.8trn. At PayPal, because of our close relationships with small businesses, we are uniquely positioned to help them succeed. We understand that for small businesses the pace of change is rapid and, on occasions, unpredictable. PayPal Working Capital is designed to respond to this by providing flexible capital, which can typically be approved and funds obtained within minutes.”

The working capital service isn’t PayPal’s first foray into the small business space. Last year it worked with a number of small firms to improve access to contactless payments with its card reader.

  • Notwithstanding the otherwise constant stream of disingenuous and delusional nonsense that flows from eBay/PayPal, the share price history of these two clunky operators demonstrates the reality:

    Aug 2007: (pre John Donahoe) EBAY ~$40; AMZN ~$40;
    Jul 2015 (pre eBay-PayPal split): EBAY ~$66; AMZN ~$480;
    Jul 2015 (post-split): EBAY ~$28; PYPL ~$37; AMZN ~$530;
    Recently: EBAY ~$24; PYPL ~$37; AMZN ~$743—LOL …

    PayPal is standing still, and eBay has for years been effectively going backwards—at a steady rate of knots.

    Notwithstanding the “spin-off” of PayPal from eBay, eBay and “PreyPal” remain effectively joined at the hip—for at least the next five years—and anyone that thinks otherwise is simply uninformed; and, thanks to a continuation of most of the destructive policies introduced over the eight year reign (2007–2015) of the “Pain from Bain”, John Joseph Donahoe II, the eBay marketplace is continuing on its slow journey down the toilet; nevertheless, during Johnny Ho’s occupation of the eBay corner office, this cretin and his gang of hand-picked Keystone Kops still managed to obtain for themselves massive, unearned, “performance” bonuses—while the company’s shareholders received not one penny.

    PayPal is a clunky, non-bank-licensed (except in Luxembourg), non-deposit-insured, virtually non-regulated, “pretend” bank; a higher fee-charging payments intermediary that, in the main, rides on the back of the world’s banks’ existing payments systems, with no formal agreement with those banks other than PayPal’s operating of a credit card merchant account facility with, and the making of direct debits/credits on some users’ bank accounts via, one of those real banks.

    PayPal is, in its own words, “a merchant of sorts”; it is not a licensed “bank”; virtually everything that “PreyPal” does is done via “marketing” arrangements with licensed financial institutions—for example, look for the identity of the actual credit provider (in the micro print) on their credit providing instruments.

    Merchants’ funds received via “PreyPal” are at risk of being subjected to lengthy arbitrary holds; $18 billion of users’ funds left “on deposit” with the PayPal faux “bank” are not FDIC deposit-insured. Even more perilous (for PayPal’s shareholders), the great majority of PayPal’s business originates from its (still) effectively mandated place on the eBay marketplace, so it logically follows that—with the destructive Johnny Ho-Ho-Ho now sitting at the head of the PayPal boardroom table—”PreyPal” will undoubtedly be accompanying eBay on its journey to the sewage farm.

    The reality is, PayPal’s parasitic, higher fee-charging payments operation has little long-term future—outside of its mandated place on the atrophying eBay marketplace—now that professional online/mobile payments offerings from MasterCard (“MasterPass”) and Visa (“Visa Checkout”) are available to any online merchant that has (or can obtain) a credit card merchant account with a real bank.

    With respect particularly to “mobile” payments, notwithstanding Apple Pay’s disappointing initial showing, methinks Apple Pay, Samsung Pay, Android Pay, “MasterPass”, and “Visa Checkout”, that is, those entities that have formal relationships with the world’s retail banks and MasterCard/Visa, will soon enough bury PayPal’s parasitic operation.

    PayPal users should never give PayPal an authority to direct debit their bank accounts; PayPal should only ever be given access to funds via a real-bank credit card account; that way your credit card-issuing bank will be the final arbiter of any transaction dispute; further, by using PayPal you forego the usual statutory protections that apply to credit card transactions. Conversely, sellers should never accept payment via PayPal for goods that are going to be picked up by the buyer; PayPal offers sellers zero protection from scammers in such circumstances.

    PayPal is effectively a “pay day” lender. In May 2015, PayPal was fined $10 million over its “Bill Me Later” service, in part for unfairly charging some customers deferred-interest fees. The company was also required to return $15 million to consumers who used the service, which is now called PayPal Credit.

    PayPal’s one-time adoptive parent, eBay, is likely the most unscrupulous commercial entity operating on this planet; but, have no fear, eBay is an equal-opportunity fraudster; demonstrably, they will knowingly aid and abet the defrauding of buyers by unscrupulous eBay merchants who bid on their own auctions, and, conversely, of honest sellers by unscrupulous buyers—as long as there is a financial benefit in such fraud for eBay.

    And if anyone thinks that the clunky “PreyPal” is any more scrupulous than eBay—given their equally poor customer service and lack of any mediation of transaction disputes by human beings, which effectively results in a hard-wired bias towards buyers/payers that they now necessarily have to pander to—good luck to all you small online merchants who may get burned in the process.

    For a detailed analysis of the ugly reality of eBay’s demonstrable, calculated, facilitation of endemic shill bidding fraud on consumers on its auctions marketplace, Google “Shill Bidding on eBay: Case Study #5”

    Goodbye clunky PayPal—it’s not been nice knowing you—Google “Retail Payments: The Reality” …

    • Jonathan Murray

      So Philip why do online retailers like me use PayPal? Your analysis shows PayPal are not a proper bank – but ALL ‘proper banks’ are completely corrupt, with IT systems from the 1950s which virtually begs the massive fraud that is going on. I would suggest that the lack of interest in developing their IT systems is specifically so that they can hide corrupt practices behind the volume of fraud directed at them.
      I have used 3 of these so-called banks to trade online and they terrible in every way.
      PayPal have at least acceptable integrations for online transactions which a company like mine can use.
      PayPal have customer service which is a different WORLD to what the banks offer.
      The reason PP is forced to carry on as a virtual bank is because of the oligarchy of the UK banks and the UK government that refuses to question their power. Banks which are frankly not useless – they are criminal enterprises. All UK banks should have their licenses reviewed and PP should be offered one.

      • PayPal is mandatory on eBay, so I’ll assume that you are electing to use PayPal off eBay. And, if so, why would you use PayPal when MasterPass and Visa Checkout are now available and have lower discount fees?

        “ALL ‘proper banks’ are completely corrupt, with IT systems from the 1950s which virtually begs the massive fraud that is going on.”

        Clearly, for some reason, you don’t like banks, and that is your prerogative, but, again, why would you choose to pay a higher discount fee for credit card transactions?

        “I have used 3 of these so-called banks to trade online and they terrible in every way.”

        You’ll have to explain that statement in a bit more detail. Regardless, maybe you should investigate MasterPass or Visa Checkout—whichever your “corrupt” retail bank supports—presuming that you do use a retail bank, or do you leave you surplus funds “on deposit” with the PayPal faux bank—LOL …

        “PayPal have customer service which is a different WORLD to what the banks offer.”

        PayPal offers better customer service than MasterCard/Visa? Clearly, you are delusional …

        “The reason PP is forced to carry on as a virtual bank is because of the oligarchy of the UK banks and the UK government that refuses to question their power. Banks which are frankly not useless – they are criminal enterprises. All UK banks should have their licenses reviewed and PP should be offered one.”

        Now I definitely know that you are utterly delusional—or simply a poorly-educated PayPal shill …

        Now, if you want to see a demonstrably criminal enterprise at work, Google “Shill Bidding on eBay: Case Study #5”

        • Jonathan Murray

          MasterPass and Visa Checkout are a too late attempt by these monopolist companies to catch up with PP and apple on mobile payments.
          I put several million through PP each year as both PP Checkout and PP Pro merchant system and it is pretty faultless.
          Personally if the IT disaster that is 3D secure (and please don’t mention AVS!)’s anything to go by the anything to do with Visa or MasterCard will also be amateurish and insecure.
          My personal opinion is that the financial infrastructure of the world is archaic & insecure and governments/EU are too timid to challenge the banks to get it updated and made secure.
          You accuse me of being a PP shrill – but your claims about Visa and MC suggest you are PR for them?

          • Well, I’ve given you the facts of “PreyPal”; if you choose to prefer PayPal notwithstanding those facts, assuming that you are not simply an eBay merchant forced to use PayPal, I will leave you to continue paying the much higher discount fee that PayPal charges its merchants …

            Now, I’ll leave you to have the last delusional say …

          • Jonathan Murray

            I don’t trade with American pirate corporations like eBay or Amazon. My PP fee is 1.2% which is unbeatable. Wide range of developer API’s, top quality account manager, low fees, access to developer team… there is nothing that gets close.

          • “PreyPal” is a parasitic middleman that uses the banks’ existing systems to move funds from one bank to another—assuming the receiving merchant is not naive enough to leave his funds “on deposit” with the PayPal faux bank.

            The reality is, if you are so large a trader that you are in fact paying only a 1.2% discount fee to “PreyPal”, then you most likely could get a still better deal directly from your own retail banker—assuming that you already have a credit card merchant account with a real bank—LOL …

          • Jonathan Murray

            I have used HSBC ePayments, Barclays and WorldPay. They are all based on really shoddy software. ePayments is so bad it verges on criminal. Their attitude to customers card details is appalling. When we were using ePayments they were using a 10 year old version of Clear Commerce – they then moved on to an even worse platform!
            Basically the banks have no interest at all in card payment security – everything is resolved via insurance.
            They leave everything to Visa and Mastercard. The result is total chaos with absolutely no regulatory oversight.
            And in steps PayPal who actually write software and are interested in supporting the retailers who use their system.
            Your responses are generally to insult me and say I don’t know what I am talking about – so far I can see no evidence you have any idea what you are talking about and are just a PR for two of the most hopeless and monopolistic corporations ever to abuse their positions…

          • Are you really suggesting that the MasterCard and Visa credit card systems are not effective and that they are “two of the most hopeless and monopolistic corporations ever to abuse their positions”? If you are, then you truly are a fool, or a PP shill …

            I am not interested in what may well be the clunky payments options from individual UK banks that you may have used in the past; I’m talking about the professional online extensions of the credit card payments system that are now being offered by MasterCard (“MasterPass”) and Visa (“Visa Checkout”) and which are available to any merchant operating a credit card merchant account issued by a real bank.

            Regardless, you have never dealt directly with MasterCard or Visa; when you deal with “them”, you deal only with the retail bank that has issued the credit card or credit card merchant account …

            Regrettably, I conclude from your comments that you are indeed a clod …

          • Jonathan Murray

            Its true I have never dealt with them directly – however I can see they are willing to work with banks who take peoples card details over insecure networks using insecure software.
            If Visa and MasterCard had ay interest in card security they would require vendors to meet basic standards. PCI/DSS is a standard that based around a ‘Self Assessment Questionnaire’ and the banks force retailers to comply but do not comply themselves.
            So what more insults do you want to throw at me? What assertions do you want to make that are backed by just your blind faith?

          • Clearly, you are the one operating on “blind faith” …

            The world’s retail banks now offer perfectly secure online payments via MasterCard’s “MasterPass” and Visa’s “Visa Checkout”. Either of them is more efficient than PayPal; everything is done directly between the two banks involved, without the intervention of a clunky middleman like PayPal. And, you obviously don’t follow the PayPal dramas reported regularly on the internet …

            Both MasterPass and Visa Checkout, being extension of the credit card system, are covered by the statutory protections that come with the use of credit cards; people who pay via PayPal lose those statutory protections even if the their source of funds is a credit card. Merchants have no statutory protections; only those “protections” offered in the micro-print of PayPal’s 270-page terms of business which, naturally, are designed to favour PayPal …

            I have had a very, very small business and have had credit card merchant accounts with two of the major banks in Australia; I have never paid more than 1.9% on my not great number of transactions; PayPal, on the other hand, charges up to 3.9%; PayPal simply has to charge more because they are a parasitic middleman and the majority of sensible buyers’ funds are sourced via credit cards—unless the buyer/payer is so naïve as to be leaving their funds “on deposit” with the clunky PayPal faux bank or has given “PreyPal” an authority to direct debit their real bank account which, again, provides users no statutory protections.

            If you have a business banking account with a real bank (assuming you are not so naïve as to be also using PayPal as a “bank”), you should at least talk to such a real banker about the “MasterPass” or “Visa Checkout” extensions to the banks’ credit card merchant account facility (also presuming that you have, or could obtain, such a credit card merchant account). If you are as large a merchant as you claim to be, you may well be surprised …

            No point in me commenting any further; if you think that “PreyPal” offers you more protection than a real bank I can only say, good luck with that …

          • Jonathan Murray

            Ok Philip you have at last set out a good case. I will take a look at what they are offering.
            Next time please – less of the sniping and patronising…