PayPal enteres Buy Now Pay Later
PayPal is trying to take the steam out of the leaders in the Buy Now Pay Later (BNPL) market by introducing it’s own Buy Now Pay Later product which will be a pay in 4 option. This pay in 4 option will allow customers to pay four interest free payments with no fees for late payments. This is in contrast to other Buy Now Pay Later businesses who charge late fees.
This new product is a direct attack on the world’s largest Buy now Pay Later company, Afterpay who is estimated to make over $70 million a year from late fees last year and over $100 million this year. This figure has been rising over the years with more active users and new Buy Now Pay Later players entering the market.
Corporate regulators have not been happy with the fees charged buy the providers with the charges being seen as excessive or unnecessary in some cases. Investigations have shown that one in five people using the service miss one of their payments. Concerns around the target market of the providers are coming to the forefront with many of the younger generation using these payment schemes generally go without essentials to meet payment obligations.
Buy Now Pay Later is big business in Australia with transactions on the platform growing 90 percent over the last couple of years. Transaction numbers are well over 30 million.
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