PayPal pushes into Buy Now Pay Later with new product
Digital payment giant PayPal has today announced it will be venturing into the Buy Now Pay Later (BNPL) space.
Similar to other BNPL companies, PayPal’s product will allow customers to have a limit of up to $1,500 for transactions, which can then be paid back in four equal instalments interest-free, with the first instalment being paid at the time of purchase.
There is a $10 late payment fee, which is capped at $30 for purchases over $125, or $10 for purchases under $125.
As the product does not charge interest, it will not be regulated under Australian credit laws. However, Toon says the company will be conducting extensive background checks on customers to ensure appropriate applicants are approved.
PayPal is also looking into the new BNPL Code of Practice which was released last Monday.
“PayPal has developed a reputation over many years as being a responsible payments platform, and that is absolutely the focus of what we’re looking to achieve through the entry into the buy now, pay later space,” said PayPal Australia’s general manager of payments, Andrew Toon.
According to Toon, the decision to launch the BNPL product came in response to the high volume of requests the company received from its Australian business customers.
“They’re looking for us to be able to deliver choice and flexibility to their customers in the PayPal checkout,” he said.
The PayPal BNPL product was already launched in the US last year with huge success.
“In six months in the US, they got 45 million BNPL customers with the same product,” said chief executive of payments consultancy McLean Roche, Grant Halverson. “They would be the biggest [BNPL] threat to come here.”
If you’d like to find out how PayPal’s new BNPL product stacks up to other offers on the market, head on over to our comprehensive Buy Now Pay Later guide or our in depth Buy Now Pay later statistics report.