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PayPal Holdings Inc. says it has lent $50 billion to American consumers since it bought the BillMeLater lending service 11 years ago. The company also advanced its efforts to generate revenues from its Venmo peer-to-peer payment service by making subscription payments to the Tidal music-streaming service available through Venmo.
Now called PayPal Credit, the lending service generated nearly $10 billion in U.S. total payment volume 2018 alone, including more than $2 billion in the November-December period, the San Jose, Calif.-based online-payments firm reported Monday. PayPal in 2008 bought BillMeLater, a so-called transactional lender that enabled merchants to offer instant credit to their customers.
PayPal sees PayPal Credit as an alternative to conventional lending and as a way to spur PayPal purchases. “At PayPal, we’re committed to using our platform to democratize financial services and break down barriers to make it easier for people and businesses to manage their financial lives and pursue their goals,” Darrell Esch, vice president and commercial officer for PayPal Credit, said in a blog post. “PayPal Credit offers a flexible, revolving line of credit available in the PayPal wallet that customers can use again and again at any merchant that accepts PayPal Credit, without the need to reapply for each transaction, bringing in billions of dollars in open to buy to PayPal merchants.”
Esch noted that purchases financed by PayPal Credit at AutoAnything, a fast-growing online automotive-products retailer, typically are 35% higher per transaction than other payment forms available in the PayPal wallet.
PayPal Credit is available in some countries besides the U.S. The United Kingdom and PayPal are “seeing significant growth year over year,” PayPal said. PayPal, however, in July removed itself from the direct risk of lending by selling about $6.9 billion in PayPal Credit receivables to Synchrony Financial.
Meanwhile, Tidal, which tries to distinguish itself in the crowded music-streaming field through its high-fidelity sound, reported Tuesday that Venmo is now a payment option for American subscribers.
“Tidal customers in the United States can now set up monthly payments for the service using their Venmo balance, linked bank account, credit card or debit card,” Sweden-based Tidal said in a news release. “This integration represents Venmo’s first partnership with a music-streaming subscription service.”
Last month, the TV and movie streaming service Hulu added Venmo as a subscription-payment option. Since P2P transactions cost Venmo consumer users nothing, PayPal has been looking to merchants to generate acceptance revenues from the service.
