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PayPal Resumes Growth of Its Merchant Lending Program

PayPal's CFO says the 2023 credit tightening behind its merchant lending program is over and merchant originations are growing again, though only modestly.

By Larry Reid

News · · Updated Oct 22, 2026 · 2 min read

PayPal logo on the screen of a black smartphone photographed against a white background

PayPal told investors on October 29 that the underwriting squeeze it imposed on its merchant lending business a year earlier has run its course, and that new merchant originations have begun to climb. CFO Jamie Miller delivered the message on the company’s third-quarter call.

“We have now fully lapped the actions taken last year to tighten credit underwriting and reduce on balance sheet risk,” Miller said. Results across the book are better, she added, and originations are growing at a small scale. Management plans to keep watching how much exposure the company carries, in order to preserve what she called a “balance sheet light” model while giving customers more tools for cash flow, spending and borrowing.

How deep the cut was

The reversal follows a sharp contraction. Through the first three quarters of 2023, PayPal bought $1.3 billion of merchant receivables, down from $2.3 billion in the same period of 2022, deBanked reported then. Acting CFO Gabrielle Rabinovitch referred to a “tightened origination strategy”. The company blamed rising charge-offs on risk limits it had loosened in 2022.

The effect lingered into 2024. PayPal’s first-half purchases came to $774 million, compared with $1.4 billion in the first half of 2022, and only $355 million of the 2024 figure fell in the second quarter. deBanked cautions that purchases are a proxy, not originations, and estimated the fall in volume at up to half. In the same piece it noted that Enova originated $918 million of small business loans in Q2 2024 alone.

Other numbers from the call

Miller said credit revenue faced less pressure than at any point in the three prior quarters. Revenue from other value-added services grew 2% to $780 million.

What remains unconfirmed

No Q3 origination or receivables-purchase figure appeared in the call remarks we reviewed, and “modest” is PayPal’s own descriptor. The claim of better portfolio performance is management’s assessment, not an outside measure. PayPal’s quarterly filing, which would show purchases for the period, was not available for this report.

Sources

About the author

Larry Reid

Larry Reid covers merchant cash advance and alternative lending markets for The Fund Scope, from lender strategy and new entrants to the policy shifts that move the industry.