Issues

Small businesses play a critical role in the global economy. Yet many UK entrepreneurs have struggled to get financing to help them develop and grow, a problem that became more acute in the wake of the 2008 financial crisis as retail bank branches closed and those that remained decreased funding to small businesses. However, this study demonstrates how PayPal Working Capital is providing small businesses with access to finance in precisely those places where traditional financial institutions have pulled back.

Across the United States, vast numbers of people, maybe more than we previously realized, have not benefitted fully from globalization. Historically, only the largest businesses in the country could fully reap the benefits of trade. Moreover, businesses that traded were often concentrated in large city centers, often close to the coastline, in order to reduce the distance costs associated with trade. The Internet changes the calculus of who can fully engage in globalization by eliminating traditional barriers like distance, trust, and communication. Breaking down these barriers can enable businesses outside major cities and those located on the coasts to reap the economic benefits of an open economy.

The term "fintech" is often used to describe tech startups that are presumably going to upend traditional financial institutions (ie. Banks) through the use of new technology. Such a characterization, however, misses a large amount of what is truly transforming the financial services ecosystem. At PayPal, we believe that our nearly two decades of experience gives us a strong position to speak about what FinTech really is. This paper is our attempt to provide an insider’s perspective on the potential and the reality of fintech.

The remittances market is a valuable external source of funding for many families around the world. The traditional costs of securely and efficiently managing and moving money across borders have been relatively high. Advances in digital technology are enabling a significant reduction in remittances costs. This study looks at the digital remittance solutions developed by Xoom and PayPal.

Small and Medium-sized enterprises (SMEs) account for more than half of the world’s GDP and employ two-thirds of the global workforce. The number one barrier to growth faced by SMEs around the globe is access to financing. While lending to large firms has rebounded relatively quickly from the Great Recession, lending to small businesses is down approximately 20% over the same period. Online lending options like PayPal Working Capital, may be stepping in to fill this gap by resolving many of the barriers associated with traditional SME financing.

Charitable organizations pursue important causes and provide public services, with no intention of making a profit. Donors, be they individuals, groups, or companies, spend their hard-earned dollars to support these causes. Transferring funds from donors to charitable organizations, however, takes resources. The wide variety of payment methods available today – checks, credit cards, digital wallets, etc. – has democratized charitable giving by enabling people of any means to become donors. Each payment method though comes with its own unique set of costs and benefits.