PayPal Will Expand Business and Consumer Lending Outside the U.S.

San Jose, California-based PayPal, a division of eBay, announced its intention to extend its consumer and small business lending programs beyond the US on Wednesday. This move is part of an ambitious plan for international expansion.

eBay aims to extend the reach of its ‘Bill Me Later’ consumer lending program, now rebranded as ‘PayPal Credit’. This service is set to debut in the UK and Germany by year’s end. PayPal Working Capital, a lending program targeting small businesses, is also scheduled for launch in the UK and Australia.

By growing its global presence, PayPal hopes to transition from a service exclusively for eBay buyers and sellers to one resembling a traditional banking institution. Despite stiff competition from rivals like AOL and Square, PayPal remains at the forefront with innovative solutions such as its in-store checkout system.

PayPal is showing belief in its lending capabilities, said Gary Marino, Senior Vice President of Global Services at PayPal. The company mainly targets customers with exceptional credit ratings for its loan programs.

PayPal’s sales shot up by 20% to $1.95 billion in the second quarter, doubling the growth of eBay’s main marketplace unit. With a user base of 153 million active customers, PayPal surpasses the e-commerce marketplace in user count.

David Marcus, PayPal’s former chief, recently moved to Facebook. eBay confirmed that they are still in the process of finding a suitable replacement and until then, eBay Chief Executive John Donahoe is temporarily overseeing PayPal’s operations.

Starting from the previous year, PayPal commenced offering business loans with a flat fee and no interest charges. So far, the company has issued $150 million in loans. The fees are dependent on the loan size and repayment speed, typically falling under 10%.

Marino also indicated that PayPal is looking to significantly increase the maximum loan limit, from $20,000 to $60,000.

Acquired by eBay for roughly $1 billion six years prior, the consumer lending division—now known as PayPal Credit—has consistently turned a significant profit. With this service, instant loans are offered to online customers on select websites like Walmart.com and Apple.com, despite annual interest rates peaking at an astronomical 20%.

Steve Allocca, Vice President of Global Credit at PayPal, revealed the possibility of expanding PayPal’s credit services into the offline space, notably into the realm of auto loans, in the future. However, there are currently no immediate plans for this integration.

Updated in 2025 to align with recent developments.