Competition in the BNPL market intensifies! PayPal announces cancellation of late payment fees

PayPal has announced that it will no longer charge late fees for its buy now, pay later (BNPL) service worldwide. Previously, PayPal's BNPL service in Germany and Australia had waived late fees.

It is reported that starting from October 1, new users will no longer have to pay late fees when shopping with Pay in 4 in the United States, Pay in 3 in the United Kingdom, and Pay in 4X in France. The company first began offering BNPL services last year. Since its launch, more than 7 million consumers have used the service and the company has processed more than $3.5 billion in total payments.

PayPal said the BNPL service does not incur additional fees for sellers, while increasing their conversion rates and increasing the number of items in the shopping cart by 39%. In addition, 50% of consumers paid off their additional PayPal payments within three months of their first use, while 70% paid off within six months.

In an interview, Greg Lisiewski, vice president of global BNPL products at PayPal, said that the existence of late fees hinders the user experience. Given the increased competition brought about by the explosive growth of the BNPL market, the elimination of late fees will be more in line with the needs of today's consumers and sellers.

When asked if there was a risk that removing late fees would encourage more consumers to default on their loans, Greg said he did not expect to see that happen. PayPal does not disclose the default rate of its BNPL services.

Editor✎ Irene/

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