Against the backdrop of a pandemic, it comes as no surprise that consumers are actively looking for the best ways to manage their finances and pay fewer fees.
According to a recent study conducted by PayPal, findings revealed that 57 percent of Gen Z and Millennials say they believe using buy now, pay later solutions is a “smarter way to shop” while 37 percent say it gives them more control of their finances and 33 percent reporting that no late fees are an important feature in choosing a BNPL option.
With these consumer sentiments in mind, PayPal has announced that starting on Oct. 1, 2021, new customers will forgo any charges for late or missed payments for purchase made through PayPal’s suite of BNPL products — including Pay in 4 in the United States, Pay in 3 in the United Kingdom, and Pay in 4X in France. Notably, PayPal’s BNPL solutions in Germany and Australia are already fee-free.
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“Building on the success of our Pay in 4 launch in Australia without late fees, we know that eliminating late fees delivers an even better buy now, pay later experience that provides incredible value to our consumers and merchant partners,” said Greg Lisiewski, vice president of global pay later products at PayPal.
Ultimately, he said, the move will give consumers even more assurance in their choice to use PayPal’s global BNPL products. “We’re able to help provide consumers peace of mind as they manage their plans on their terms while also helping merchants increase sales conversions,” said Lisiewski. “This change is closely coupled with PayPal’s mission and values as we seek to remove hurdles that provide financial services to customers of all types while helping our merchant partners succeed in the changing retail landscape.”
While consumers appreciate BNPL for the financial flexibility it gives them, it is important to note that merchants are also seeing the benefits of the increase in consumer demand for BNPL. According to PayPal, merchants who offer Pay in 4 from PayPal benefit from 50 percent Pay in 4 repeat usage within three months of their first purchase and 70 percent within six months and see conversion rates boosted with cart sizes increasing by as much as 39 percent.
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