Self-Serve Minimum Repayment:
Loan Servcing Enhancement
Launched Q2 2019
Objective
Introduce self-serve minimum repayment information in the loan servicing dashboard to inform merchants and help them remain in good standing with their PayPal Working Capital loan.
This project was one of several feature enhancements meant to lay the groundwork and prepare the PayPal Working Capital framework to sustain enterprise solutions that would allow PayPal to approve and lend to a wider population of small business merchants.
My role
Lead designer
Platform
Responsive web
Skills
Information architecture, interaction design, usability testing, dev collaboration
Background
PayPal Working Capital is a flexible business loan repaid through a share of the sales each merchant processes through PayPal. Merchants generally don’t have to worry about loan repayments as the loan is automatically repaid as their business gets paid.
However, merchants are required to meet a minimum repayment amount by paying 10% of their original loan amount every 90 days. Meaning, if their sales aren’t trending towards the minimum repayment every 90 days, a merchant may need to submit a manual payment to make up the difference. Failure to meet the 90 day requirement is considered a breach of their loan agreement.
Internally, the PayPal Risk rates the merchant’s performance in 30-day “delinquency buckets” in addition to their breach status. The expectation is that merchants should be meeting their 90 day minimum repayment requirement by paying a third of it every 30 days. If payments are inconsistent during the 90-day period, merchants can be recorded as “delinquent” in any 30-day bucket despite ultimately satisfying their requirement for the 90-day period overall.
Problem
Merchants have no way to self-serve by tracking the status of their minimum repayment within the existing loan dashboard.
Challenge
Because most of the delinquency conditions are internal facing only, we were legally limited in how transparent we could be about the delinquency criteria. This created a challenge in communicating with transparency and clarity to merchants about how to put them in the best position for subsequent loan offers. Additionally, back-end limitations meant some key calculations on past due scenarios are not available to display to the merchant.
Goals
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Introduce an easy and intuitive way for loan customers to view details about their minimum repayment requirement on their loan servicing dashboard.
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Reduce confusion around their min pay status and help customers maintain awareness to self-serve on their loan repayments.
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Help reduce delinquency and charge-off losses.
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Help reinforce merchant assistance conversations.
Research
We knew from an ongoing series of foundational research studies that most merchants are aware of the requirement and intend to keep up with it. But given no way to track the status, they have to operate off guesstimates of their current standing.
Merchants expressed frustrations over receiving cold calls from collection agents when they had every intention to stay on top of their loan requirements, but simply had no access to their current status.
Merchants wanted:
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To know where they stand with their loan repayments.
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To be aware of their risk of breach and be given the opportunity to correct it before being contacted by Collections.
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To have numbers and repayment history to reference should they receive a call from Collections requesting payment.
Final Solution
Prominently display requirement
Introduce the fixed minimum repayment amount into the loan details section so merchants have a persistent point of reference for the exact dollar amount of their minimum repayment.
Provide a reminder of what the minimum repayment requirement is since the information is currently buried within the loan contract that the merchant has to download to see.
Re-evaluate information architecture
Reduce cognitive load by separating dynamic numbers from static information.
Make the ‘Make a payment’ button more accessible by relocating it higher in the left rail and docking it with the dynamic numbers to which it is relevant.
Create secondary hierarchy by grouping static contract-based information in a secondary section and relocate the relevant ‘Download contract link’ to this area.
Created dedicated area for minimum repayment information
Enclose min pay content behind a second tab on the main screen of the servicing experience to ensure attention can be drawn to it when necessary, but still allows it to fade into the background when merchants are in good standing.
This solution allows us to address two key callouts voiced by business stakeholders:
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With the cadence being every 90 days, this is not something that should be distracting.
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Merchants should not mistake the minimum as a target repayment amount.
Provide live look at current period
Any breach becomes a permanent record so to help merchants stay aware of their performance, I proposed that we:
Provide clear communication on current progress by introducing a section that tracks repayments and time left in the current 90-day period.
Introduce three status badges that could clearly communicate their status at a glance, and encourage prompt action as needed.
Encourage continued performance by displaying a cumulative sum to avoid giving the impression that the minimum requirement is some type of target or limit.
Keep a record of closed periods
Although past breaches do not cure, merchants may still owe payments on past due min pay amounts and would need to be alerted to take action.
The collections strategy around this is complex and technical constraints prevented key calculations for self-service from being possible in the immediate future.
As a stop-gap, I proposed that we provide a clear record of the merchant’s past 90-day periods to allow savvy merchants to self-serve until key calculations can be supported on the back-end.
For merchants in need of more guidance, I introduced alert messaging that would direct any merchant in this breach state to contact Merchant Assistance for a white glove service in identifying their past due payments.
Make it easy for merchants to pay the outstanding amount
To reduce cognitive load, I updated the payment flow to included the calculated minimum repayment amount so merchants can easily note when they're behind and submit a manual payment to bring their loan into good health.
Results
Increased payments
8.2% increase in manual payments submitted by merchants in delinquent and at risk states.
(Data based on months following launch)
Decreased delinquency
6.4% decrease in merchants who breach current 90-day periods.
(Data based on months following launch)
Customer satisfaction
Merchants expressed resounding excitement and gratitude for this feature via customer feedback channels following launch of this enhancement.
(Based on monthly survey results July-December 2019)