Dive Brief:

• Adding another tool for small businesses to its services, PayPal is offering small business credit cards in collaboration with Mastercard, Concerto Card Company and WebBank, the digital payments company announced on Tuesday.
• The small business offering includes a virtual card, free employee cards and 2% cashback on purchases, as well as Mastercard benefits such as an extended two-year warranty on purchases, access to discounts through the card network’s savings program and identity theft protection. The cards are also integrated with PayPal’s merchant platform, allowing them to view the transaction history via the cardholder’s PayPal business account, the company said.
• Once approved, cardholders can immediately access their virtual credit card, per the announcement.

Dive Insight:

With its small business credit card launch, PayPal is concentrating more on entrepreneurs. Last December, the fintech platform announced its buy now-pay later and credit services were being offered to sellers using Wix, allowing them to access “Pay in 4” installment plans and PayPal credit tools. 

The launch of PayPal’s small business credit card appears to be in response to small business owners seeking credit to finance their businesses. The company cited the 2022 Federal Reserve Bank’s small business credit survey, which found that 76% of respondents sought loans or lines of credit, and 29% wanted credit cards. Not to mention that a March survey from American Express and its subsidiary Kabbage found that small businesses have seen higher profits but have also had to adjust to inflationary pressure. 

“As small business owners continue to recover from the challenges of the past two years, having multiple financing options to address their capital needs is more important than ever,” Bernardo Martinez, vice president of global merchant lending at PayPal, said in a statement.

The new offering “provides merchants greater value, more choice and the increased flexibility they need” to manage their finances, Martinez said in the statement. “This new solution continues PayPal’s commitment to supporting small businesses and offering options to help manage the day-to-day costs of operating their business," he said.

Besides its collaboration with PayPal, Mastercard also has been eyeing small business clientele. The card network teamed up with Highnote and Flowcast earlier this year to launch a small business credit card tailored to business owners who can’t access credit and growth capital.

In addition to providing PayPal’s business credit cards, WebBank partnered with the payments company to provide a buy now-pay later option for shoppers. Earlier this month, the two companies announced that WebBank will provide financing for the PayPal service. Similarly, WebBank issued physical Visa cards with Klarna’s “Pay in 4” option.