PayPal Buy Now Pay Later (BNPL) Launch Into the Market

 

In the face of severe market competition, PayPal has released an update to make its buy now, pay later (BNPL) option more appealing.

The payments behemoth has announced the addition of a new Pay Monthly plan, which will allow users in the United States to extend their payments over up to 24 months.

The service is available for purchases ranging from $199 to $10,000, with interest rates ranging from 0% to 29.99 percent APR based on the length of the payment plan.

The battle for Buy Now Pay Later (BNPL)

Apple announced ambitions to enter the BNPL market earlier this month with its Pay Later Programme, which will let customers to split any purchase made with Apple Pay into four instalments.

Given the magnitude of Apple's installed base and the widespread availability of Apple Pay-compatible online payment systems and POS terminals, the business appears poised to capture a significant share of the industry.

Faced with competition from Apple, PayPal has taken steps to set itself apart by offering significantly longer repayment terms. Users must repay BNPL loans (up to $1,000 in value) within six weeks on Apple, but PayPal now provides a two-year grace period and permits far more expensive transactions.

However, some people are concerned about the long-term impact of BNPL on personal budgets, especially for younger, less financially knowledgeable buyers. The fear is that the widespread availability of BNPL will encourage purchasers to make unnecessary purchases, locking them in a cycle of interest payments and damaging their credit ratings.

PayPal, on the other hand, sees the issue differently, emphasizing the flexibility that BNPL provides buyers in the face of significant inflation and a big spike in the cost of utilities.

"As the macroeconomic situation changes, people are looking for methods to stretch their budgets and gain more control over their purchases," said Apur Shah, PayPal's president of BNPL.

"When it comes to purchasing, there is no one-size-fits-all approach, and the buy now, pay later sector is no exception." We feel that having a full portfolio of BNPL plans, in addition to our PayPal Credit revolving credit product, gives clients more options to choose from when it comes to budgeting and preferences."