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  • Writer's pictureMagdalena Gołębiewska

eBay and Santander in a lending partnership

Santander Bank and a leading marketplace - eBay - confirmed a lending partnership for SMBs (small/medium businesses). Seems that 2 giants tries to combat competition from other tech giants and newer digital rivals. As a "digital rivals" I mean PayPal as well, since last week company announced that it had passed $10bn in total loans issued to small businesses. 

Asto, a financial technology app owned by the Spanish Santander, will start offering loans to the more than 200,000 small and medium-sized businesses that sell products through eBay in the UK later this year.  When exactly - we don't know, but since B2B lending seems to be a hot topic, I think we will not wait too long, and definitely it will happen before Christmas season.

The companies decided that will share the data, thanks to that, Santander will be able to connect to eBay’s data on measures such as sales and cash flow to identify prospective customers and strengthen its credit decision-making process. 

Sigga Sigurdardóttir, Asto chief executive, said:

“Working with eBay, Asto will empower small business owners with secure access to funds in a matter of minutes from their phone, versus traditionally several weeks.” 

Well, let's correct mr Sigga here, that several weeks maybe the banki process takes, but there is a lot of FInTechs which do that in much faster, for example mentioned above PayPal Working Capital.

I believe that such a strong competition in this are made Santander build Asto, which is one of several in-house “start-ups” being developed by them as part of a four-year, €20bn technology investment plan designed to fight back against challengers and big technology groups encroaching on banks’ business.

Other initiatives include Openbank, a standalone digital bank started in Spain that is expanding into Germany, and is set to move into the Netherlands and Portugal later this year.  Business lending, which tends to be less regulated than consumer lending, has been a particularly active area for challengers to expand worldwide. 

Amazon provides loans to companies that sell on its marketplace, while payments companies such as Square and PayPal — which eBay spun off in 2015 — are also pushing into the market alongside specialists like OnDeck and Funding Circle.

For eBay, the service will boost its offering to sellers as it tries to catch Amazon and fend off younger rivals such as Etsy, the online crafts marketplace. Last year it agreed a partnership with Square to offer similar lending products to its US sellers.

The California-based company was a pioneer of online commerce but has lost market share and is going through a strategic review under pressure from activist investors.  Paolo Levoni, eBay chief operating officer, said to Financial Times:

“Our partnership with Asto is designed to help our business sellers efficiently access cash loans to help them expand and manage cash flow — our latest step in helping small businesses in the UK to thrive.”

Contributed | This content is contributed or sourced from third parties but has been subject to FTHours editorial review. Source: Financial Times.

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