PayPal enters the installment market with a new BNPL product

PayPal is launching its ‘Pay in 4’ platform in the United States to compete with Klarna and other ‘buy now, pay later’ based businesses.

This new service is an expansion of PayPal’s existing products, like PayPal Credit’s revolving credit line and its Easy Payments.

The company claims that ‘Pay in 4’ will help merchants drive conversion, revenue, and customer loyalty without taking on additional risk or paying any additional fees.

Read also: Swedish unicorn Klarna reports increase in net losses

All customers are able to choose to pay for purchases between $30 and $600 over a six-week period.

Because it’s included with the merchant’s existing PayPal pricing, they won’t have to pay more fees to offer the option to their customers — as they do with several competitive “buy now, pay later” services.

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“In today’s challenging retail and economic environment, merchants are looking for trusted ways to help drive average order values and conversion, without taking on additional costs. At the same time, consumers are looking for more flexible and responsible ways to pay, especially online,” said Doug Bland, SVP, Global Credit at PayPal, in a statement about the launch.

“With Pay in 4, we’re building on our history as the originator in the buy now, pay later space, coupled with PayPal’s trust and ubiquity, to enable a responsible and flexible way for consumers to shop while providing merchants with a tool that helps drive sales, loyalty and customer choice,” he added.

As PayPal is connected to a customer’s payment card or bank account, it reduces the chance of a forgotten payment. However, if the customer can’t pay, there will be fees involved.

The fees will differ depending on the particular US state, as each state has its own late fee structure which PayPal will abide by, the company says.