PayPal Holdings Incorporated or PayPal is an electronic payments company that is based out of California in the United States. PayPal Credit Review explains how Online Money Transfers and has been instrumental in replacing traditional paper currency in the American Economy. It was established in 1998 under the name Confinity but later on, went to become PayPal as it is known today.
Paypal had its Initial Public Offering in the year 2002 and since then it has been a publicly listed company. In the year 2002, it also became a wholly-owned subsidiary of the company eBay. PayPal Credit is a subsidiary of PayPal aimed at providing an easy and direct credit line to customers. Bill Me Later (BML) was a company that provided transactional credit at over 9000 online merchants in the US which were acquired by PayPal and rebranded as PayPal credit.
How Paypal became a huge success?
As Confinity, the company dabbled in handled devices and it used to create security software for them. In 1999, PayPal emerged as an electronic payment arm of Confinity. X.com was another banking company formed by the legendary innovator Elon Musk and Confinity ended up merging with X.com. In the year 2000, a decision was made that X.com would cease all other operations and focus just on its electronics payment arm.
The company was renamed to PayPal in the year 2001. This year was also marked with rapid expansion for the company. The management then decided to make take the company public in the following year, 2002. PayPal listed PYPL as its ticker and its Initial Public Offering was launched at $13 per share. The Initial Public Offering ended up generating over $61 million.
In 2002 itself, PayPal was acquired by eBay on the 3rd of October for an amount of $1.5 Billion which was 77% over its IPO price. This acquisition augmented eBay’s auctioning platform and a lot of transactions on eBay started happening over PayPal.
In 2005, PayPal acquired VeriSign to augment its e-commerce business and to provide security support. PayPal collaborated with MasterCard to develop the PayPal secure card service which in turn allowed PayPal to be used on websites that didn’t accept PayPal as a payment option.
In the month of November of 2008 PayPal went on to acquire Bill Me Later (BML) which later rebranded as PayPal Credit. In 2011, PayPal became a payment method at most shopping stores.
The idea of providing flexible credit for purchase to customers was not new in the market. Formerly, a few entities existed but none of them had the market share that Bill Me Later (BML) had. Hence, to foray into this sector, PayPal decided to acquire Bill Me Later (BML) so as to tap into its existing 9000 merchants that accepted this payment method. On November 7, 2008, PayPal completely acquired Bill Me Later (BML) from I4 commerce and made it into a subsidiary.
The platform is accepted at the websites of a host of well-known merchants like Walmart, JetBlue Airways, Best Buy, Home Depot, USPS, Jewellery Television, Hotels.com, and Overstock.com. This platform offers its customers a revolving line of credit. Thus it allows them to make payments without owning or using a credit card. This feature is provided in collaboration with Synchrony Bank. For this, the company received the Red Herring Global 100 award by the publication Red Herring.
How to use PayPal Credit?
PayPal is a simple and convenient payment method that appeals to most people. A customer must simply open their account including credit check to use this platform. During payment at the website of a merchant that accepts PayPal credit, a customer must simply log in to their PayPal account to complete the transaction.
PayPal credit will honor this transaction without the customer having to shell out his or her own money. Subsequently, the customer can log in to their PayPal account and then pay the amount there through a check, net banking or card payment.
After linking the PayPal and the PayPal credit accounts, PayPal Credit becomes a funding option within the account. The customer can then pay off their PayPal Credit amount through the parent PayPal platform itself. The company offers complete customer support to PayPal credit customers. They also provide full email services that intimate the customer upon receipt of payment.
How does PayPal credit work?
Many people end up confusing PayPal credit to be a credit card especially since the platform has the name credit in it. PayPal Credit is a revolving line of credit that can be reused once the balance amount is paid after drawing a particular limit of credit. It functions like a credit card and allows customers to acquire credit without owning a credit card. Even though it has many features of a credit card, there is no physical card for PayPal Credit. Yes! PayPal credit is totally digital.
It is important to note that PayPal credit may charge a penalty fee for the balance payments towards the credit drawn from the platform exceeds a particular time frame. However, you get a notification way before the deadline to ensure paying within the time frame. You also receive an intimation via email in case they default on the payments or if the last date is drawing near.
PayPal credit follows ethical practices while charging customers and hence is a reliable method of obtaining easy and quick credit. For purchases over $99, the customers have six months to pay their pending amount in full. If unpaid, they will be charged an interest rate of 26.24% annual percentage rate from the original date of purchase. This will continue till the principal amount and the interest (if any) are paid in full.
PayPal Credit is not as popular as the platform of its parent company, PayPal. It is not widely available but it is available with some of the leading merchants of the United States. However, this may change since new e-commerce companies can request integration through a portal operated by PayPal.
PayPal follows due diligence while onboarding new e-commerce vendors. They consider the profit potential and usage of PayPal on the respective website. It has been quite a successful platform on different websites for both customers and sellers. You can now you PayPal credit everywhere people allow payments through PayPal.
Advantages of PayPal Credit
Flexible credit is not something many companies foray into. This is due to the risk involved in the business and the competition from existing credit card companies. PayPal could afford this due to the massive success of the other financial facilities.
One of the biggest advantages of PayPal credit is the flexibility it offers to the customers. One can pay at a merchant site without worrying about having sufficient funds on PayPal and then later pay the money back to the platform from other sources. This gives customers the ability to easily and quickly honor their immediate monetary commitments.
2. Easy credits
PayPal credit allows people easy access to credit without the burden of owning a credit card. Credit Card companies charge their customers an annual fee and many people are skeptical about owning Credit Cards due to their spending habits. Such people can only find their money debit after a transaction or not have sufficient funds before paying. PayPal Credit Review offers this segment of people information on easy and flexible credit and thus brings them into the credit fold.
3. Helps people with bad credit score
Some people are riddled with bad debt and hence cannot procure sufficient credit lines to meet their commitments at times. PayPal Credit is more liberal in this case and allows you to take credit without strict rules. Additionally, PayPal allows customers to set up recurring payments that occur automatically as per the scheduled date set by the customer.
4. Personal loans made easy
By providing people with credit, PayPal Credit allows people to forego taking personal loans which attract a heavy interest. Through PayPal credit Review, customers can acquire feedback towards quick and easy interest-free credit that too without any annual fee. PayPal also offers its customers protection against unauthorized charges through its Zero Fraud Liability program.
PayPal offers a flexible payment option where a customer has to pay a minimum monthly payment to avoid a penalty being charged. Subsequently, if the full amount is paid back within six months of the date of the original purchase, no interest is charged. The minimum monthly amount is not the bill amount equally divided over the six months within which it has to be paid. It is usually a lesser amount than that and the company notifies the customer every now-and-then to clear it. The customer bears the onus to pay the entire amount within six months even if it is not completely covered by the minimum monthly payment.
Who can use PayPal Credit?
PayPal Credit Review mentions that PayPal does not check your overall credit score which comes as a relief to some of its customers. However, that does not mean that anyone and everyone can use PayPal credit.
PayPal offers this service only to the customers which they feel can easily repay the amount. It uses the Average Daily Balance Method and a few other metrics to assess credibility and assign a credit limit. If you have sound financial data, you will get a higher credit limit. It automatically increases as you keep buying more and continue to have a good credit score on PayPal.
Joining PayPal Credit
PayPal Credit Review indicates that joining PayPal credit is easy and can be done instantly. It asks a few basic questions like the date of birth, last four digits of the social security number and most importantly the after-tax income. Once all this is entered, the customer just needs to accept the terms and conditions. The decision of whether or not a prospective customer is eligible to use PayPal credit is given within seconds. If approved, the customer can immediately start using PayPal Credit to pay their bills at partner vendors.
PayPal Credit Reviews
PayPal Credit Review is favorable to most people who can manage their credits on time. More and more vendors are putting in requests to PayPal to integrate it with their websites. PayPal Credit review has been well-received by the customers and partnered e-merchants alike. The goodwill the platform has earned over time is sure to help the company expand its reach, increase its usage, and acquire more customers.
PayPal was no stranger to the electronic payments landscape but with PayPal Credit, it entered the microfinance sector as well. This expansion has boded well for the company as most of the PayPal Credit Review is favorable. PayPal Credit has made the lives of the average PayPal customer easier by providing access to revolving credit quickly and efficiently. Moreover, the flexible payment options help this platform and appeal to its users.
PayPal Credit is ideal for people who don’t need regular credit but do rely on it sometimes and don’t wish to own a credit card. It is also ideal for people who are skeptical of owning a credit card or don’t wish to pay its annual charges. It is important to note that PayPal Credit is an intermediary and not the actual lender. The actual lender is Synchrony Bank and PayPal Credit acts as the facilitator. Through PayPal Credit, PayPal has created the ideal microfurnace product, a credit option that acts like a credit card without any of its drawbacks. The overall growth of PayPal Credit looks good and will improve over the years.