The first of up to 55,000 Australian small businesses identified as worthy of securing a PayPal loan will this week be offered loans of up to $20,000. The PayPal Working Capital loans initiative is now in its final test phase before being rolled out nationally at the end of the year.

The motivation is to help build small businesses in order to drive PayPal transactions; PayPal reaps 1.1 to 2.4 percent of the value of each payment plus 30 cents per transaction over its network.

To repay the loans small businesses can pay an upfront fee and nominate to pay between 10 and 30 percent of each transaction to PayPal until the loan is cleared.

Just as fast as the technology company can expand into what has traditionally been the banks’ bailiwick, the financial sector is becoming more tech savvy.

According to Gartner the two sectors are almost neck and neck in terms of their technology spending as a percentage of revenue – and lead all other industry groups – with software publishing and internet services investing 6.7 percent of revenues on IT compared to banking and financial services on 6.3 percent.

Last week the Commonwealth Bank opened the doors of its Innovation Lab which bristles with technology from Oculus Rift virtual reality stations, to communications beacons, state of the art software testing labs and interactive white boards displaying the results of its big data analysis.

The lab is intended as an ideas incubator and accelerator for internal bank teams, CBA partners and customers and follows similar initiatives from Westpac which last month launched its Hive innovation centre and NAB with The Village in Melbourne.

Commonwealth Bank CEO Ian Narev gave a clue as to why there has been this scurrying to become more like a Silicon Valley start-up, noting that for a bank; “being able to be leading edge … is a life and death matter.”

CBA chief information officer David Whiteing said that the bank needed to learn from Silicon Valley and allow itself to experiment, learn from failure and then reap the benefit of those learnings. He has also signalled plans to open the bank’s APIs to external software developers to create a software ecosystem surrounding the bank.

The pace of finance sector innovation is relentless, Westpac this week released its PayTag NFC stickers which, combined with a payments app, turn any mobile device into a tap and go payments wallet. Meanwhile New Zealanders’ appetite for technology enabled banking is also on the increase.

ASB this week revealed that the number of financial transactions taking place on its mobile app rose 66 percent this year, eclipsing internet banking.