PayPal expands BNPL push with installment loans


PayPal Holdings Inc. is pushing deeper into the growing “buy now, pay later” arena by offering installment loans for larger purchases.

Consumers will be able to make monthly payments on purchases of $199 to $10,000 for two years, PayPal said in a statement. Annual percentage rates on loans could reach 29.99% and consumers will be subject to credit approval. The move comes almost two years after PayPal launches its Pay in 4 offerwhich allowed consumers to split their purchases into four payments over six weeks.

“We’ve been really, really pleased with the progress and traction that Pay in 4 has received,” Greg Lisiewski, PayPal’s vice president of purchases and subsequent payments, said in an interview. “But we’ve also heard quite often that one size doesn’t fit all. There is a demand on both sides of the network, especially on the consumer side, for additional choice. »

More BNPL choices

The San Jose, Calif.-based company is expanding its offerings as buy now, pay later attracts rivals. Apple Inc. announced Apple Pay Later earlier this month. Analysts expect consumers to spend more than $100 billion a year on these products by 2024. Apple ranks third in the Digital Commerce 360 ​​database of the top 1,000 online retailers. It ranks e-tailers based on web sales.

Still, investors began to tire of the offers. PayPal’s stock has fallen 62% this year, outpacing the 28% drop in the S&P 500 information technology index.

Other companies known to buy now, pay later are also facing pressure. Klarna Bank AB seeks to exploit investors for more money in a move that break the valuation Swedish fintech. And Block Inc. warned investors in recent weeks that loan losses soared 347% to $91 million in the first three months of the year. Most were from his purchase of Afterpay.

PayPal hopes consumers will try BNPL and then look for its other offerings. This will be crucial as the company strives to boost app usage rather than frantically adding new customers. PayPal has processed more than 105 million payment transactions in four since 2020. This represents a payment volume of $15 billion on its platform.

“People perpetually need help managing their cash flow to fund larger purchases and to pay over time,” Lisiewski said. “This need is perpetual.”


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