PayPal was a relatively early entry in the buy now, pay later (BNPL) space, launching its Pay in 4 product in the summer of 2020 and acquiring Japan-based BNPL provider Paidy a year later. This week, the digital payments provider added another option to its BNPL offering.
Pay Monthly enables consumers to split large online purchases ($200-$10,000) into monthly installments of anywhere from six to 24 months. While many BNPL offerings are interest-free, annual interest on Pay Monthly purchases can be anywhere from zero to 29.99 percent.
"How consumers look to pay for larger purchases is evolving and there is a growing demand for flexible payment options with 22 million PayPal customers using our pay later offering this past year," said Greg Lisiewski, vice president of Shopping and Pay Later at PayPal. "Pay Monthly builds on our commitment to deliver leading payment solutions that offer customers choice to ensure checkout matches their needs and budgeting preferences."
As popular as it is with consumers, being relatively new, fraudsters are also taking advantage. Several large e-commerce merchants that have been early adopters of BNPL reported a new method being used by cybercriminals to circumvent fraud prevention systems and processes, and ATO has been problematic for BNPL providers and merchants.