PayPal will stop charging late fees for customers using its buy now, pay later (BNPL) service anywhere in the world as of Oct. 1, the company announced Wednesday (Aug. 18) in a press release emailed to PYMNTS.
The change brings other markets in line with a practice PayPal already employs in Australia, the release stated. The service is known by names including Pay in 4 in the United States, Pay in 3 in the United Kingdom, and Pay in 4X in France.
“Building on the success of our Pay in 4 launch in Australia without late fees, we know that eliminating late fees delivers an even better buy now, pay later experience that provides incredible value to our consumers and merchant partners,” said PayPal Vice President of Global Pay Later Products Greg Lisiewski in the release. “We’re able to help provide consumers peace of mind as they manage their plans on their terms while also helping merchants increase sales conversions. This change is closely coupled with PayPal’s mission and values as we seek to remove hurdles that provide financial services to customers of all types while helping our merchant partners succeed in the changing retail landscape.”
A PYMNTS study in July found that the benefits to merchants of BNPL plans are considerable.
Among the researchers’ findings: “[BNPL offerings] may introduce merchants to previously inaccessible audiences while improving their in-store revenue prospects: BNPL users tend to make more in-store purchases than consumers paying with other methods.”
In the press release, PayPal cited Samsonite data indicating that customers using Pay in 4 increased average order value by 25 percent.
“Our customers have had the option to use PayPal Pay in 4 since October 2020, and we’ve seen an incredible response and adoption as our customers experienced different economic situations and wanted flexible payment options,” Samsonite Vice President for Marketing and eCommerce David Oksman said in the release.