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PayPal banks on life in credit card sector

  • June 11 2021
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PayPal banks on life in credit card sector

By Cameron Micallef
June 11 2021

Payments giant PayPal has announced that it is bringing a zero interest credit card to Australia, despite the buy now, pay later sector hammering Australia’s credit card spending.

PayPal credit card

PayPal banks on life in credit card sector

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  • June 11 2021
  • Share

Payments giant PayPal has announced that it is bringing a zero interest credit card to Australia, despite the buy now, pay later sector hammering Australia’s credit card spending.

PayPal credit card

Just a week after figures showed that consumers are swapping credit cards for other forms of payment, PayPal has announced that it has a credit card offering targeted at Australia’s 9.1 million current credit users.

The latest APRA banking data showed that credit card lending remains significantly below pre-COVID-19 levels (approximately 20 per cent).

While figures released by the Reserve Bank showed the stock of credit card debt accruing interest continued to dwindle, the total number of accounts dropped by more than 900,000 in the past year.

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However, a declining market has not deterred the payments giant from launching its own credit card in Australia, with expectations it could tap into its vast network to offer customers a unique experience.

In a product statement, PayPal said the new card would have zero annual fees and uncapped rewards points, with the ability for consumers to earn points with every eligible purchase and redeem points at more than 750,000 PayPal businesses globally, including more than 300,000 PayPal businesses in Australia.

PayPal Australia’s general manager of payments, Andrew Toon, said credit cards would remain a key payment option for many consumers, and PayPal saw a clear opportunity in the rewards card segment.

“There’s no silver bullet payment option that’s preferred by all Australians, so we want to ensure that however customers prefer to pay, they can choose to do it with PayPal,” he said.

However, despite the challenges of the BNPL sector, which PayPal is also a part of, the company highlighted RBA data which showed that credit cards still account for 19 per cent of all consumer purchases – the same share as in 2013.

“So, that’s a significant proportion of our customers that we want to ensure we’re accommodating,” Mr Toon continued.

The new credit card provider said flexibility in reward programming will be a key differentiator compared with other providers.

“The pandemic has made the value of flexible rewards even clearer, as many Australians have been left with travel-related points they haven’t been able to use the way they would like to due to safety concerns and border restrictions,” Mr Toon explained.

PayPal noted the interest rate on the card will be 20.99 per cent with applications opening mid-July 2021.

PayPal banks on life in credit card sector
PayPal credit card
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About the author

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Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

author image
Cameron Micallef

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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