PayPal is wading into the crowded and overvalued buy now, pay later sector, offering installment loans for large purchases.
PayPal users will now be able to make monthly payments on purchases between US$199 to $10,000 over a period up to two years.
The loans are hefty, with annual percentage rates up to 29.99 per cent, and credit approval requirement.
This follows the company’s Pay-in-4 offering, which splits payments over six weeks.
PayPal has processed 105 million pay-in-four transactions, making up US$15 billion since 2020.
“We’ve been really, really pleased with the progress and traction that pay in 4 has received but we also heard pretty frequently that one size does not fit all,” Greg Lisiewski, PayPal’s vice president of shopping and pay later, said.
“There’s demand from both sides of the network — particularly on the consumer side — to have additional choice.
“People perpetually need help with their cash-flow management to finance larger purchases and to pay over time. That need is perpetual.”
PayPal needs this to be a success, with stock falling 62 per cent this year alone.
