PayPal will rely on deferred payment to maintain growth in Spain | Companies

PayPal will bet on deferred payment to grow in Spain. Beatriz Giménez, the new director for Iberia of the company specializing in means of payment, has set herself two main objectives: maintain the growth rate that PayPal experienced during the pandemic by the rise of electronic commerce and attract new business customers through tools that help them generate sales. To do this, the firm will rely on the deferred payment functionality.

PayPal launched the Pay in three installments option at the end of 2021, which it intends to make its flagship product in Spain. It is a ‘buy now, pay later’ method that allows customers to split the payment of a purchase in three installmentswithout interest or commissions.

“We are very focused on this product. It is being a success and we hope it will be more so. In the stage of uncertainty that is coming now, it can help SMEs a lot because many of them cannot finance purchases from customers on their own. The fact that an SME not only no longer has to worry about how their client pays, but that you are going to help them receive payment, is an unbeatable value proposition at a time when everything is becoming more and more expensive. And it helps to generate more sales”, explains Giménez to Five days.

Despite the fact that in recent months in the fintech sector specializing in deferred payment, have cut valuations and adjusted the templates due to non-payments, the director of PayPal assures that at the moment the company has not had an impact due to delinquencies.

“The current experience is very good and it is because we have a great competitive advantage, which is data. This business is based on models and data. We have models because we have been in the world of credit for many years and data also because we carry out 700 operations per second globally. We have everything we need and today it is not a problem. And we’re so confident that we don’t charge a late fee,” he adds.

According to figures provided by PayPal, 21% of SMEs opened their online channel during the pandemic and the company seeks to position itself in the business fabric offering tools to digitize payment systems. “We want to make the payment process as simple, secure and affordable as possible so that companies only have to take care of their business,” explains the director of PayPal Iberia.

Secondly, Giménez highlights the security PayPal offers to SMEs and the confidence it generates in customers who do not know the company in which they want to make a purchase for the first time. “PayPal has a lot to offer SMEs in terms of the ability to add trust to their brand. When someone pays an SME online, there is a high probability that they do not know the brand and the fact of going hand in hand with PayPal adds security and confidence to the client, ”he values.

PayPal currently has 6.4 million active accounts in Spain, which represents the fifth largest market in Europe for the American company. Globally, the payment method company has 429 million active accounts and the goal is to reach 439 in 2022, which would mean adding ten million more in the second half of the year.

Payment flexibility

Models based on deferred payment have experienced a new boom to which most financial institutions have joined in recent months. And it is that 44% of customers would abandon their purchase process if the ‘buy now, pay later’ option was not available. This is reflected in a survey recently conducted by PayPal, together with the research company ACA, to Spanish consumers and companies. The figure increases to 49% in the case of millennials and generation Z. Therefore, in the next two years, 29% of sellers are looking to implement new payment technologies, according to data from PayPal.

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