PayPal is launching a new “buy now, pay later” (BNPL) option for purchases of up to £2000 for any stores which offer PayPal as a payment method in the UK.
“PayPal Pay in 3” is the company’s latest major push into the BNPL space and will be available to customers ahead of this year’s peak shopping season.
Shoppers can now access the payment plan, which allows them to pay for any purchase between £45 and £2000 in three interest-free installments, potentially from any retailer which uses PayPal.
PayPal is used by a whopping 79 per cent of the top 100 online retailers, meaning it has a vast inbuilt audience and poses a major threat to established BNPL firms like Klarna.
It comes after the PayPal launched a similar “Pay in 4” service in the US in September, but this marks its first foray into the growing UK payments market.
According to PayPal, there was a 39 per cent year-on-year increase in BNPL payments in the UK last year, a trend it expects to double by 2023.
Customers who choose the payment plan will have the amounts deducted from their PayPal accounts or connected bank accounts automatically every month, and can manage their payments via the PayPal app.
“During the coronavirus pandemic, we have seen the number of people in the UK shopping online increase dramatically,” PayPal UK’s director of enterprise accounts Rob Harper said.
“At the same time, many more consumers are looking to spread the cost of those purchases. We have developed PayPal Pay in 3 to meet that need, building on our heritage as a responsible lender through PayPal Credit, which we launched in the UK in 2014, and has served more than two million customers to date.
“We will continue to support for UK retailers and businesses through these challenging times by helping them adapt to changing consumer behaviours around how they shop and pay – especially in the lead up to Black Friday and Christmas.
“PayPal Pay in 3 offers a flexible way for over 24 million PayPal users to shop while providing companies with a tool that helps drive sales, loyalty and customer choice.”