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PayPal Expands Repayment Options

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PayPal announced this week that its PayPal Credit solution will now offer term and interest rate flexibility. Formerly known as “Bill Me Later,” the rebranded service is part of PayPal’s focus on its credit products.

Writing in PayPal Forward, VP/GM for Merchant & Retail Solutions, PayPal North America, Steve Alloca said that PayPal Credit was geared toward helping merchants increase “average order value” or AOV. One of the features of the new PayPal Credit, for example, allows consumers to divide large purchases into smaller ones. This makes it easier for shoppers to use PayPal for expenses typically paid for with credit cards, and can contribute toward larger purchases via PayPal.

But the main selling point of PayPal Credit is the term and interest rate flexibility. Wrote Alloca, “retailers can customize PayPal Credit to offer a monthly payment option and decide on the number of months and interest rate that works best for their customers.”
PayPal also announced new Business Consulting services to help SMBs learn best practices in fields such as increasing conversation rates and reducing card abandonment. TechCrunch’s reporting notes that these services have been available to larger PayPal merchants before the announcement. Pricing for the services has yet to be announced.
VentureBeat’s coverage of the news highlights PayPal’s growing role in payment processing and merchant services, and suggests that the kind of expansion into consumer credit PayPal has begun “could be scary for banks.”
PayPal Credit is a line of credit from Comenty Capital Bank, and can be used wherever PayPal is accepted, as well as on eBay purchases. Approval are completed in seconds after application and, once approved, customers will have a credit line of at least $250, and the APR for standard purchases and cash advances is 19.99%. There is no annual fee.
PayPal made its announcements at the National Retail Federation conference. A Finovate alum since 2011, PayPal was most recently a co-sponsor of the inaugural FinDEVr San Francisco 2014 conference last fall.