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Paypal has joined in on the rapidly growing ‘buy now, pay later’ trend. The payment service provider has introduced a credit option that allows its users to purchase goods and pay for them in four interest-free installments.
PayPal boards the ‘buy now, pay later’ wagon
PayPal has become the newest entrant in the rapidly growing ‘pay later’ trend. Its latest product, Pay in 4, enables its users to make purchases on credit and pay for them in four installments without incurring interest. The customer makes the payments of between $30 and $600 within six weeks. After the first settlement, the remaining repayments are programmed.
Besides, PayPal’s connection to the user’s bank account or payment card lessens the probability of one forgetting to make the payment. If the client fails to honor the terms of repayment, he/she will pay extra fees, which depend on his/her area of residence. As of now, the product is only available in the US.
Doug Bland, the Senior Vice President of Global Credit at PayPal, stated, “With Pay in 4, we’re building on our history as the originator in the buy now, pay later space, coupled with PayPal’s trust and ubiquity, to enable a responsible and flexible way for consumers to shop while providing merchants with a tool that helps drive sales, loyalty and customer choice”.
Pay in 4: An addition to PayPal’s existing credit purchasing solutions
Pay in 4 is not the only credit option that is available to PayPal users. Before its introduction, the firm has been running the Easy Payments and PayPal Credit setups. The Pay in 4 option uses the same concept as the other two products. However, all of them have specific terms and conditions.
The growing popularity of ‘buy now, pay later’
PayPal’s Pay in 4 comes at a time when the ‘buy now, pay later’ trend has gained momentum. Its competitors include Klarna and AfterPay, among others. In Australia, AfterPay has become the biggest startup with a valuation of more than $23 billion. Klarna, on the other hand, is one of the biggest fintech startups in Europe, with a valuation of more than $5 billion.
This credit option seeks to benefit the customers and merchants alike. On the one hand, the ‘buy now, pay later’ policy encourages consumers to spend more. At the same time, clients can own products that initially seemed to be too expensive to afford. Notably, the ongoing COVID-19 pandemic has contributed to the popularity of this e-commerce trend. With the rise of online shopping, customers are interested in flexible payment solutions.
Final Thoughts
The ‘buy now, pay later’ trend has gained popularity in the e-commerce space. Klarna and AfterPay are some of the companies that offer this service. PayPal is the newest entrant to this subsector. Its Pay in 4 product enables clients to pay in 4 non-interest installments.
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