PayPal has added a feature which allows people to pay for items in three instalments as part of efforts to boost sales for UK businesses in the run-up to Christmas.
The new Pay in 3 tool will enable businesses using the payments service to offer customers the ability to pay for goods over three, interest-free instalments, automatically taken each month.
The tool will be available for purchases between £45 and £2,000, with businesses receiving the full cost of the purchase upfront from PayPal to ensure continued revenue for the firm while providing more payment options for customers, PayPal said.
The new service will go live later this month with retailers including Crew Clothing, French Connection, Robert Dyas and Ryman confirmed to be integrating the tool at launch.
Rob Harper, UK director of enterprise accounts at PayPal, said the new system would help people continue to support a retail industry hit by the coronavirus pandemic without overstretching themselves financially.
“During the coronavirus pandemic, we have seen the number of people in the UK shopping online increase dramatically. At the same time, many more consumers are looking to spread the cost of those purchases,” he said.
“We have developed PayPal Pay in 3 to meet that need, building on our heritage as a responsible lender through PayPal Credit, which we launched in the UK in 2014, and has served more than two million customers to date.
“We will continue to support UK retailers and businesses through these challenging times by helping them adapt to changing consumer behaviours around how they shop and pay – especially in the lead up to Black Friday and Christmas.
“PayPal Pay in 3 offers a flexible way for over 24 million PayPal users to shop while providing companies with a tool that helps drive sales, loyalty and customer choice.”
The firm believes there is a clear appetite for “buy now, pay later” tools, citing figures from Worldpay’s FIS 2020 Global Payments Report, published in February, which showed that last year in the UK there was a 39% year-on-year increase in the proportion of such systems, a trend which it says is expected to double by 2023.