Paypal introduces fee-free ‘buy now, pay later’ product in Australia

Karthik Subramanian

Paypal has announced the introduction of its new fee-free ‘buy now, pay later’ product across all its merchants in Australia in its latest push in the BNPL market.


Though it may be a bit surprising to note that this product has been launched in Australia first, it does make sense as the country is known to behave the highest usage of the BNPL product over the last year or so. The BNPL Pay in 4 product is already available in Paypal in the US, UK and France but the latest twist of ‘fee-free’ has been offered in only Australia for now.

Andrew Toon, general manager, payments, PayPal Australia, says: “Our business model does not rely on late fee revenues and we believe that many people who miss a payment do so by mistake, not design. By removing late fees, we are providing our Australian customers with a secure buy now, pay later service without the risk of being penalised for late payments.”

The product is known as Paypal Pay in 4 as the users would be allowed to pay back the amount in 4 instalments, one right at the time of purchase and 3 fortnightly instalments. This option would be available for the users only on the checkout page and only if they have a good standing account with Paypal. It is also believed that this would be available only for low-cost products up to $1500.

The data and analytics for the payments and whom to offer it to are being generated by Paypal itself which uses the data from its user accounts to determine who should be given this option, the credit limits etc. In certain cases, the company may rely on external credit score data from the credit score companies.

This further heats up the BNPL market which is seeing exponential growth in recent times and is being seen as the product that is likely to rejuvenate the credit market which has been stagnating in recent times due to the pandemic. Only yesterday, we had reported that Apple was tying up with Goldman Sachs for launching a BNPL product for purchases made on the iOS store. This is likely to expand to products outside the store in due course of time and this is going to compete directly with Paypal products and the BNPL products of other companies as well, big and small.

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