The IT Nerd

If you’re a PayPal user in Canada, you likely got an email that looks like this one in the middle of August:

Now most of us ignore these sorts of emails. But you shouldn’t ignore this one. Because included in the changes that they reference, is this little factoid:

So the way I read it, if you don’t use your PayPal account for 12 months, you get dinged $20. This isn’t the first time PayPal has implemented an inactivity fee, as the company introduced a similar fee on UK accounts in December 2020. But the reaction to this in Canada has been the same as the UK. Which is there has been a very negative reaction. Some have deleted their PayPal entirely because of this.

To avoid the inactivity fee, simply log into your PayPal account or use your account to make a payment at least once per year. Additionally PayPal will not charge credit or debit cards linked to your account and will withdraw any inactivity fees from PayPal wallet balances. In other words, you will not be charged if you have a $0.00 wallet balance.

To close your PayPal account, simply log into your account online, withdraw any funds from your wallet balance, then click the gear icon along the top navigation bar and click Close your account under your profile. To remove a credit or debit card from your account, log into your account online, then click Wallet along the top navigation bar to manage all cards linked to your account.

PayPal has some explaining to do on this front as the way this has rolled out really seems “sketchy A.F.” because it looks like it was done under the cover of night rather than being done in the light of day where the company could clarify things for users. That would have avoided this negative reaction that is being seen now.

A new study by PayPal Canada, Business of Change: PayPal Canada Small Business Study, shows how dramatically the pandemic has accelerated digital commerce for Canadian small businesses. Two in three small businesses (67%) accept payments online and half (47%) of them only started doing so this year. Of all small businesses selling online, one third (34%) turned to digital payments only after Covid-19 was declared a global pandemic in March.

Canadian businesses have lagged behind their U.S. and global counterparts in embracing digital commerce in previous years, but this study revealed a positive shift. The number of Canadian small businesses selling online spiked nearly 400 per cent in the last five years with the global pandemic being a major catalyst for merchants going digital.^[1]

The majority of online small business owners (72%) believe e-commerce is now necessary in order to have a successful business. In fact, 69 per cent of online small business owners said selling online has made them more successful. 

Impact of Covid-19 on Canadian Small Businesses

Being online was a matter of survival for Canadian entrepreneurs. Without the ability to sell online, 58 per cent of small business owners said they don’t think their business could survive the impact of Covid-19.

While being online has certainly made running a business during a pandemic easier, the coronavirus has nonetheless had a deep impact on the bottom line. More than half of small businesses have been negatively impacted by the pandemic (55%) and one in four business owners say they are not confident they can sustain themselves over the next six months (26%).

However, there were also some positive outcomes for entrepreneurs who proved to be resilient and innovative. The vast majority of small businesses (84%) are doing some type of preparation for future waves of Covid-19 and 64 per cent say the pandemic has motivated them to consider new ways to grow their business.

According to the survey, when it comes to payment methods, 58 per cent of online small businesses shared they prefer PayPal over other payment options. More than 80 per cent of business owners who use PayPal say it’s a partner that will help their business succeed into the future (81%).

Other survey highlights include:

• 59% of small businesses say preventing fraud is a challenge of selling online
• Reaching customers in the U.S. was seen as a top 5 benefit of e-commerce
• 53% say they are hopeful that the holiday season will make up for some of the losses their business has faced earlier this year
• Compared to all Canadian small businesses, those that are online only tend to be owned by women (53%), millennials (47%) and from the BIPOC community (45%)
• Compared to all Canadian small businesses, offline businesses have a greater proportion of boomers (26%) and a lower representation of BIPOC ownership (31%).

Complete study findings can be found at this link.

Survey methodology
This survey was conducted by Edelman in partnership with Logit Group on behalf of PayPal between September 23 and October 6, 2020 among a sample of 1,001 small business owners with less than 100 employees. The interviews were conducted online in English and French, and respondents were sourced using Logit Group’s online panel. The margin of error is +/- 3% at a 95% confidence level.

As much of Canada enters and progresses through Stage 2 of reopening, PayPal today launched QR code payments in Canada for small businesses to accept touch-free mobile payments from their customers using the PayPal app. From local stores to hair salons and farmers markets, this new functionality in the PayPal app allows customers to buy or sell in-person, safely and securely without needing to purchase any new equipment. To continue helping small businesses, PayPal is waiving the standard seller transaction fees incurred on sales conducted using a QR Code through September 30, 2020.

Canadian consumers are increasingly wary of using cash over fears that bills and coins could be contaminated. A recent study from Payments Canada found that 62 per cent of Canadians reported using less cash than they did pre-COVID-19. The survey also found that more than half (53%) of Canadians reported using card or mobile tap payment for in-store purchases more often than pre-pandemic.

Amid business reopenings, nearly half (42%) of Canadians who are shopping in-person are avoiding  places that do not accept touch-free payments. PayPal’s QR code makes it simple, seamless and safe for businesses to accept touch-free payments.

Safely buying and selling touch-free—from local stores and hair salons to summer markets

As most of the country moves into and progresses through the second stage of the economy reopening, businesses are rapidly reviewing the guidelines to reopen. Local store owners, restaurateurs, hairstylists or farmers who have not yet figured out a touch-free payment method can create their individual QR code and hang it in their shop window or next to the cash register.

Using the QR code functionality in the PayPal app is a quick and safe way to complete a transaction and eliminate the need to handle cash. For example, those who are selling items in-person or at an outdoor summer market can print a QR code, place it on their table and have their customers simply scan the code, enter the amount they’re paying and send money immediately. This allows the seller to minimize physical interactions with the customer, while also limiting the customer’s interaction with checkout technology. There is no need to touch a point-of-sale terminal or punch in your PIN – all that’s needed is the PayPal app and a smartphone camera pointed at a QR code that is printed or present on another screen. 

For a buyer looking to pay, customers can go to the PayPal app, click ‘Send’ and tap the QR code symbol in the top right-hand corner. The camera will open, and customers can scan a seller’s QR code and follow the prompts to complete the transaction. Sellers can create a PayPal-generated QR code by following the steps outlined here.

For more information visit: www.paypal.com/ca/webapps/mpp/qrcode

PayPal has rolled out this functionality to 28 markets around the globe including: Australia, Austria, Belgium, Canada, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, Ireland, Italy, Latvia, Luxembourg, Malta, Netherlands, Portugal, Slovenia, Slovakia, Sweden, Switzerland, Spain, United Kingdom, and United States.

PayPal is now available as a new payment option on Walmart.ca as more Canadians shop online for groceries and essentials than ever before, according to new research. A survey commissioned by PayPal in early April shows that 30 per cent of Canadians are shopping online for groceries. This marks a 58 per cent jump from a comparable survey conducted just four weeks earlier, before the coronavirus was declared a global pandemic. 

Canadian consumers had already embraced online shopping before the pandemic, as 95 per cent reported in early March that they had made an online purchase. Before the health crisis, online grocery shopping was less popular, with only 19 per cent reporting engaging in the activity at the time. Now, the most recent survey shows close to one in three Canadians surveyed (30%) are shopping online to buy groceries. That survey also found that since the outbreak, more Canadians have started to shop online for essential items like household supplies (41% increase) and toiletries (33% increase), as well as other items like entertainment, toys and games (18% increase).

81% say new online shopping habits are here to stay

The new research findings seem to mark a substantial shift in Canadians’ shopping behaviours. When asked if their online shopping habits would change in the coming months, the vast majority of respondents (81%) said they anticipate shopping online the same amount or more, and 44 per cent said they expect to increase their online shopping.

Canadians who shy away from online shopping worry about secure payments

The most recent survey found that among Canadian respondents who don’t shop online, 39 per cent are worried about putting their financial information on the Internet. Walmart has chosen to include PayPal into their online checkout to help put shoppers at ease as the payment platform doesn’t share personal financial details with third parties. 

Choosing PayPal during checkout means Canadians have the flexibility of paying for their purchase with their bank account, Visa Debit card, or credit card linked to their PayPal account while earning their card-associated reward points. Opening an account is free and customers are not charged a fee when making purchases. 

Survey methodology

The findings include results of two surveys executed by Edelman through the Angus Reid Forum, the first taking place between March 3^rd and 4^th, and the second between April 1^st and 2^nd, 2020. The surveys were each conducted in English and French and included nationally representative samples of Canadians (1,562 and 1,503 respectively) who are members of the Angus Reid consumer panel.

Just in time for the holiday season shopping rush, PayPal Canada today unveiled their inaugural Social Commerce Trend Study, which reveals Canadians are increasingly turning to social media platforms and mobile apps to check off their holiday shopping lists. According to the study, almost half (47%) of Canadian social media users are currently shopping on social media and nearly 40% plan to shop on social media this holiday season. The study also found that men are shopping on social media more than women.

Additional key findings include:

• Social commerce, the next big retail trend: Canadian social media users spend 6.4 hours on social media platforms every day – which makes it no surprise that nearly half of Canadian social media users say they’re more likely to shop on social media this holiday season than they were last year (46%).
  • According to eMarketer’s 2019 Social Commerce Report, the percentage of retailers in North America using social media as a source of e-commerce nearly doubled from 17 per cent in 2017, to 33 per cent in 2018.
• Popular platforms: Facebook was identified as the most frequently shopped social media platform among Canadians (29%) followed by Snapchat (26%) and Instagram (25%).
• Spending: Canadian social media users spend $77 every month on average shopping on social media and an average of $924 a year shopping on social media platforms.
• Men vs women: Among Canadian social media users, men are shopping more (33%) than women (26%) on a monthly basis. The things they are buying most are fashion items such as clothing, shoes, and accessories (54%), electronics (26%), toys and games (21%), home décor (20%) and event tickets (19%).

• Safer with PayPal: Canadian social media users are more comfortable paying with PayPal on social media than any other payment method (70%) versus (62%) credit gift cards, (54%) credit cards, and (43%) debit cards.

For the first time in Canada, PayPal announces the PayPal Business Loan, enabling small business owners to easily access loans between $5,000 and $100,000 at competitive prices.

In time for Small Business Week, and ahead of the busy holiday shopping period, select PayPal merchants across Canada^[i] are being invited to apply for a PayPal Business Loan. To apply, business owners just need to fill out a simple online form. Applicants will know if they are approved in minutes, and if approved, funds will be transferred to the applicant’s business bank account within one to two business days,^[ii] allowing merchants to quickly use funds to buy inventory, invest in equipment, expand products or locations, manage cash flow, or anything else their business needs.

A lack of credit history, high barriers to borrowing from traditional lenders, and long wait times to receive funds have long been three challenges small businesses face when attempting to secure capital through traditional loans. Nearly one in five entrepreneurs say getting the financing they need from a traditional financial institution is challenging.^[iii]

A 2018 study found that Canadians have a real need for quicker and better financing solutions. The study found alternative loans have steadily grown to 24 per cent in 2018 – up from just under four per cent in 2013. At the same time, the alternative lending market in Canada grew by 159 per cent between 2016 and 2017.^[iv]

PayPal Business Loan borrowers have shared feedback that the process entailed much less hassle and stress compared to a traditional bank loan. They also said they appreciated knowing the total cost of the loan in advance. Before accepting the loan, a merchant is informed of the fixed fee. There are no origination fees, late payment fees, early repayment fees, application fees, or any other hidden fees. The loan applicant can request their loan amount ($5,000 – $100,000) and term (13-52 weeks). Weekly payments are subsequently withdrawn from their business’ bank account. Borrowers have said the automatic weekly repayment plan is simple and predictable.

Since launching business financing solutions almost six years ago, PayPal has provided more than $10 billion in funding to nearly a quarter of a million business owners around the world. Merchants who have taken a PayPal Business Loan in the U.S. and grew experienced an average growth of 21 per cent and 88 per cent of those businesses reported seeing a revenue boost in the first three months after accepting the loan^[v]. Most common uses of the loans include managing cash-flow (44%), purchasing inventory (37%) and investing in marketing (31%).^[vi]

In Canada, the PayPal Business Loan is currently limited to select PayPal merchants who have been invited to apply. The company expects the program to be more widely available to Canadian PayPal business account holders in 2020. Beyond Canada, PayPal financing products are available in the US, UK, Australia, Germany, and in Mexico (with partner Konfio).

[i] The PayPal Business Loan solution is not currently available in the provinces of Quebec and Saskatchewan and the territories of Yukon and Nunavut.

[ii] PayPal Canada Co. will transfer funds to your business bank account as fast as the next business day and typically within 1-2 business days following loan approval, if approved before 3:30 p.m. Eastern Time (excluding bank holidays).

[iii] The Government of Canada, ‘More Help for Entrepreneurs’, 2019

[iv] IBIS World, BDC, Cambridge Centre for Alternative Finance and the Ivey Business School at Western University

[v] PayPal Business Loan Impact Survey, Q2 2018

[vi] PayPal Business Loan Impact Survey, Q2 2018

This Sunday, on August 11^th, the world celebrates the 25^th anniversary of e-commerce. An invention that changed everything: the way we shop, travel, communicate and conduct business. And the people at PayPal have gathered a list of key milestones:

1. 1994 – Dan Kohn, a 21-year-old entrepreneur makes the first online transaction.  On August 11, 1994, Kohn sold a CD of Sting’s “Ten Summoner’s Tales” to a friend, who used a credit card to spend $12.48, plus shipping costs. That transaction was the first to be protected by encryption technology.
2. 1995 – eBay was born, first as the ‘AuctionWeb’. Its creator Pierre Omidyar wanted to create an online marketplace, and he reportedly wrote the first code for it in one weekend.
3. 1998 – PayPal launches as a secure online payment system.
4. 2004 – Blockbuster Video were the first official online film and video game subscription service. Despite their demise, they developed a simple subscription model framework that is still used today by Netflix and Amazon Prime.
5. 2004 – Shopify, a Canadian e-commerce company supporting online retailers,  launches a Canadian online store selling snowboards. Today Shopify reports it had more than 800,000 businesses in approximately 175 countries using its platform, with total gross merchandise volume exceeding $41.1 billion for calendar 2018.
6. 2006 – Canadian blogger Kyle MacDonald bartered his way from a single red paperclip to a house in a series of fourteen online trades over the course of a year.
7. 2006 – The most expensive thing purchased via e-commerce (eBay) is a $168 million, 405-feet-long Gigayacht designed by naval architect Frank Mulder for Russian billionaire Roman Abramovich.
8. 2009 – Crypto currency, Bitcoin, launched on Jan 3^rd.
9. 2011 – Canadian heartbreaker Justin Bieber’s hair is sold on eBay by Ellen DeGeneres for $40,668.
10. 2013 – KISS rocker Gene Simmons gum sells for almost $250,000.
11. 2017 – 50% of online businesses launched within the last two years owned by women.
12. 2017 – Cyber Monday sales exceed $6.5B. 
13. 2017 – While four out of five Canadians shop online, less than one in five (17 per cent) of Canadian SMEs businesses are using online payment tools such as electronic invoicing, online marketplaces, or e-commerce-enabled websites.
14. 2018 – PayPal surpasses 250 million active accounts worldwide.
15. 2018 – 87% of Canadians made an online purchase in 2018 (46% on mobile).

It will be interesting to see what the next 25 years has in store for us.

In a significant move that will help boost cross-border trade, PayPal Canada launched a new solution that offers small businesses up to 75 per cent in shipping discounts. Additional features include a one-day shipping service to the U.S., tracking links on every parcel and an integrated platform where online sellers can import their orders from popular marketplaces to arrange shipment.

High shipping costs and a lack of efficient shipping options have long held back Canadian business owners from selling internationally. Despite the fact that Canada currently has 14 trade agreements with countries around the world, only 12 per cent of small and medium businesses take advantage of these opportunities. Some of the greatest international growth opportunities are in the U.S., Canada’s largest export market, where businesses can send goods valued up to $800 free of tax, duties and brokerage fees.

In addition to deep discounts, there are a number of beneficial features of this new service:

• Sellers conducting business on different platforms now only have to go to one web page to meet all their shipping needs. After importing their sales from Shopify, Etsy, eBay or WooCommerce into the platform, sellers can easily pick and choose the quickest and most affordable way to send their parcels.
• Tracking links are available for every parcel, making it easy for packages to be traced until they reach their destination.
• One-day delivery to the United States, Canada’s leading export market.
• While most shipping solutions are subscription based, this shipping tool is available to use at no extra charge.

This new shipping solution gives Canadian business owners a strong incentive to reach beyond the nation’s borders.  In an effort to save small business owners’ money, PayPal has partnered with netParcel, a Toronto-based technology company that provides access to discounted shipping rates. As a result, more than 250,000 businesses that use PayPal can now take advantage of aggressive shipping discounts—whether they are shipping parcels within Canada, to the U.S., or anywhere overseas.

Shipping through PayPal is available now to all Canadian customers. For more information, visit  http://paypal.ca/shipping.