PayPal introduces ‘Pay in 4’ installment payment service

Dive Brief:

PayPal on Monday announced that it is offering short-term installment plans for U.S. users. As part of its new "Pay in 4" service, merchants can provide customers with the option of paying for purchases in four interest-free installments without extra fees, according to a company press release.
Customers will be able to pay down purchases between $30 and $600 over six weeks and manage their payments with their PayPal wallet within the company's app, per the statement. The service will be available to consumers on qualifying purchases in the fourth quarter.
As part of the program, merchants and partners will receive funds upfront on installment purchases and won't have to pay an additional fee to offer the service to their customers, the company said.

Dive Insight:

PayPal said in its announcement that retailers and partners like Aldo Group, Blinds.com, BigCommerce, Swappa and WooCommerce have attracted and converted customers with its financing options.

"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," Doug Bland, senior vice president of global credit at PayPal, said in a statement.

In addition to expanding into installment payments, PayPal and its subsidiary Venmo have also introduced new features for retailers. The company partnered with CVS in August to offer touchless payments via PayPal and Venmo QR codes in stores. In July, Venmo unveiled its Business Profile feature to let sellers set up their own profiles, accept contactless payments and gain transactional insights.

But as PayPal enters the payment plan market, its competitors are gaining ground, too. Splitit has integrated with Mastercard and Stripe Connect. Klarna, which reached nearly 8 million U.S. users in June, debuted a loyalty program later that month and now offers its services via Google Pay. Meanwhile, Shopify released its own installment payment plan and recently partnered with Affirm so eligible sellers can offer buy now, pay later options to customers.

PayPal's pay-over-time competitors will have to contend with its sizable market share. According to the company's statement, PayPal boasts 346 million active merchant and consumer accounts around the world.