Operating expenses in any business can be a real pain. With inflation rising each day, it is difficult to extract huge shares of profits in businesses, especially small businesses. The issue of cash crunch is a real problem right now.
Managing supply chains and paying vendors quickly for the purchased goods or services can be difficult. In fact, it is something that will decide if you will have a loaded inventory at your disposal or will suffer stocked-out inventory.
Experienced teams at leading global companies like PayPal have understood that the traditional channels of getting more capital are squeezing. Also, banks are not as lenient in lending as they were a few years ago. An instance to justify it is that Federal Reserve is also altering monetary policy, causing tough changes, hence making it difficult for companies to borrow.
However, if we check the history, we will find that the Financial Institutions have never been easy access to getting much capital for small-to-medium-sized businesses(SMBs). The system is unbalanced and inefficient. The capital of $3 trillion which is required at the end of SMB is either unavailable or not financed by the financial institutions or banks.
SMBs keep their accounts in the banks. The banks act as a vault for them and this money is stored there until it is needed. In fact, what happens, in reality, is that these SMB owners use their personal credit cards or their personal accounts for the company’s expenses. This happens because when they require cards from banks for their businesses, they do not often get them from financial institutions.
Cash management for SMBs can become better if credit is easily available to them. And if they use a virtual card that assists them in handling their everyday expenses. They can get rewarded for their daily expenses.
PayPal has launched its first business credit card- PayPal Business Cashback Mastercard. The offers that it provides are fantastic. There is no annual fee on it. Then, for every purchase you make for your SMBs, there is a cash back of 2% with no upper limit. This means there are no conditions to harness or fix the amount of cash back you can earn.
If you have a PayPal business account, you are eligible to get this card. It is issued by the WebBank (national issuer of consumer and small business credit). This comes in the light of everything getting digital. There is a considerable amount of growth foreseen in B2B transactions happening online. Let us find out more about this.
How does it work?
If you already have a PayPal business account and your SMB is approved, you will get immediate access to a virtual card. This virtual card will come with an assigned credit limit and it will be integrated into your business spending account.
As soon as you buy this card, it becomes operational for payments instantly unlike other credit or debit cards where the customer has to wait for a few days to make the card operational. SMB owners can instantly begin paying with the card in online places where PayPal is accepted.
Details about expenses or spending and other account-related information can be easily fetched through the PayPal business account of the client. There are some advanced options that allow a user to assign free cards to the employees with separate account numbers and monthly spending limits for each employee.
In today’s cut-throat competitive market, small businesses need advanced features from the banks in terms of online tools they put into use every day but it seems like banks are still trying to meet their demands. This comes as an opportunity for companies like PayPal to explore the digital market really well. In a way, this is a simultaneous relationship between PayPal and SMBs.
This card is the most popular among the other ones in existence. Through the years of business, PayPal has already lent around $20 billion to more than a million customers. PayPal now is familiar with the behavior of the customer, the needs in the market, and other such analytics that help it target the correct audience.
PayPal business account is the central point for SMBs where their fund flows are transparent and visible. This makes business and managing cash easier. There are around 20 million businesses that have an account with PayPal business accounts and in the US, there are about 33 million SMBs.
Going per these statistics, we can say that this cash-back virtual card will attract more SMBs hence, boosting PayPal’s business.
Post pandemic, many firms are trying to get back and they are taking a different approach this time. There are also some firms that have managed to stay on board even during pandemics. This scheme where they will have better access to credit for their businesses will help them achieve their targets and they will be able to move ahead in this process of transition.
PayPal with this card has tried to create a new habitat for small businesses so that they do not have to stop because of cash management or fund gaps. This instant card insurance is already getting attraction and now in this digital era, B2B spending is finding a better footing in the market.
Winding up
Business models are rapidly changing. Every day there is something new and businesses are thriving for success. Pandemic was surely a period of turmoil for all businesses, especially SMBs but it will eventually fade away and so, these businesses must keep up with changing trends and cash management should not be the issue to hold them back. PayPal is trying to offer the right tools to SMB owners and digitization is an integral part of its success.