According to Rupert Keeley,CEO of PayPal Europe, in a chat with the BBC, small businesses will not require a credit check, and pay a single fee for the advance.
Fees will depend on sales history with PayPal, the size of the advance, and the repayment schedule. Cash advances will be made in a matter of minutes and guided by the data PayPal have on the merchant.
By moving into working capital lending, PayPal is going head to head with other online services that are targeting the same kind of business and the same kind of customer and the same pain point: expensive banks that move too slow in the lending process. For example, companies like Kabbage, which advances online merchants money and even uses merchants’ PayPal histories, among other things, as part of its credit profiling algorithm. In the U.S. it also competes against the likes of Square, another payments platform that has moved into cash advances recently.