PayPal, the American online payment provider, announced that it will launch early in the fourth quarter “Pay in 4”, a short-term installment payment scheme for customers in the U.S. The service will permit merchants to be paid upfront while customers can pay for purchases between $30 and $600 over a six-week period in four installments.
Pay in 4 will be included in the existing PayPal pricing, so merchants do not pay any additional fees to use the service. Consumers will not pay fees or interest either and payments will be seamless with automatic re-payments. However, a fee may be applied if a payment is not received on time. Pay in 4 will appear on customers’ PayPal wallets, so they can manage their payments through the app, the company explained.
“In today’s challenging retail and economic environment, merchants are looking for trusted ways to help drive average order values and conversion, without taking on additional costs. At the same time, consumers are looking for more flexible and responsible ways to pay, especially online,” said Doug Bland, senior vice president in charge of global credit at PayPal.
Klarna, the Swedish online financial services specialist, has made significant inroads into providing short-term instalment solutions in the footwear industry, working with brands and companies such as VF Corp.’s brand Timberland, the Scottish footwear retailer Schuh, Adidas and its subsidiary Reebok, Clarks and Shoe Carnival.