PayPay launches merchant financing service

PayPay has started providing the “PayPay Funding” service for PayPay merchants today, allowing them to receive up to 1 million yen in advance for their future sales via “PayPay” in as little as a few minutes. This service will be offered on an invitation basis according to the merchant’s usage history of “PayPay”.

“PayPay Funding” employs a scheme in which PayPay purchases the merchant’s future claims for payment of sales proceeds via PayPay, enabling funding. Invited merchants can apply for the service in 2 steps via the merchant-exclusive “PayPay for Business” app or web version used for settlement management: ① setting the funding amount and selecting the settlement ratio, and ② confirming the funding details and applying. No collateral, guarantee, or document preparation is required.

”PayPay Funding” Application Flow

Settlements after funding are automatically deducted at a certain ratio from the monthly sales proceeds, with higher deductions in months with higher sales and lower deductions in months with lower sales, allowing merchants to settle without strain. The service fee rate varies according to the funding amount and settlement ratio set by the merchant. The presented maximum available funding amount and the ratio deducted from monthly sales proceeds for settlement are determined by AI based on future sales patterns derived from the massive transaction and settlement data held by PayPay. In 2023, “PayPay” was used for approximately 610 million transactions, accounting for more than 1 in 6 cashless payments including credit cards, code payments, and e-money. PayPay has accumulated a massive amount of data. This marks a new support service for merchants utilizing the vast data of merchants directly contracted with PayPay.

“PayPay” allowed businesses that previously only accepted cash to easily adopt cashless payments simply by placing a QR code, driving its adoption among small and medium-sized businesses since its founding in 2018. However, while confirming sudden funding needs such as unexpected equipment failures or damages, PayPay also found merchants facing many challenges in funding. Conventional funding methods like loans required time and psychological burdens for business owners, such as preparing and submitting documents for screening, often requiring collateral or guarantees, prolonged periods from application to disbursement, and strained cash flow due to fixed repayment amounts. By using this service, merchants can receive their future “PayPay” sales proceeds in advance without resorting to loans when sudden funding is required.

While PayPay has indirectly supported sales expansion through initiatives like “PayPay Coupons” and “PayPay Stamp Cards” that lead to attracting customers and repeat business, it will now provide the new option of “PayPay Funding” as a form of “funding without borrowing” to support an environment where merchants can focus on their business operations.

PayPay Funding” Service Overview

• Eligible Users: PayPay merchants determined by PayPay as eligible for funding based on their “PayPay” usage history
• Available Funding Amount: 10,000 yen to 1 million yen
• Settlement Ratio from Future Sales Proceeds: Merchants can choose from up to 3 plans
• Time to Disbursement: As little as a few minutes
• Application Method: Complete via the merchant-exclusive “PayPay for Business” app or web version
• Collateral/Guarantee: Not required (invitation-only)
• Fee Rate: 3.0% to 18.0%

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