PayPal sign at Arizona office

PayPal today announced it will no longer charge late fees for missed payments on buy now, pay later products globally. Starting October 1, new customer purchases with Pay in 4 in the United States, Pay in 3 in the United Kingdom, and Pay in 4X in France will no longer be subject to late fees – joining PayPal’s buy now, pay later solutions in Germany and Australia which do not charge late fees for missed payments. Eliminating late fees builds on PayPal’s commitment to deliver the most customer-centric, global installment solution portfolio that helps meet the needs of today’s consumers and merchants.

Consumers are looking for ways to manage their finances and pay fewer fees.  A recent study found 33 percent of consumers say that no late fees are an important feature in choosing a buy now, pay later payment option. Additionally, 57 percent of Gen Z and Millennials feel buy now, pay later is a smarter way to shop, while 37 percent say it gives them more control of their finances.  

While consumers continue to use buy now, pay later products, merchants are also seeing the benefits.  Merchants who offer the Pay in 4 benefit from the fact that 50 percent of consumers make additional PayPal pay later purchases within three months of their first purchase and 70 percent within six months. PayPal’s Pay Later offering comes at no additional cost to merchants while boosting their conversion rates and increasing cart sizes by as much as 39 percent.

“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. 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,”

“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.”

Greg Lisiewski, Vice President of Global Pay Later Products, PayPal.

Samsonite, a leader in the global lifestyle bag industry and the world’s best-known and largest travel luggage company, began offering Pay in 4 last year shortly after the solution launched in October 2020. The company experienced sustained results with a 25% lift in average order value when customers used PayPal Pay in 4.

“Our customers have had the option to use PayPal Pay in 4 since October 2020, and we’ve seen an incredible response and adoption as our customers experienced different economic situations and wanted flexible payment options,”

“We’re very excited about PayPal’s decision to no longer charge late fees, as it provides value for our consumers while also giving them the reassurance that a missed payment will not incur additional financial penalties.”

David Oksman, Vice President Marketing & Ecommerce, Samsonite.

PayPal launched pay later offerings in France, the United Kingdom, and the United States in 2020 to help merchants drive conversion, revenue, and customer loyalty without the merchant taking on additional risk or paying any additional fees. Merchants and partners get paid in full upfront while offering consumers a way to pay for purchases over a period of time. Consumers pay no upfront fees or interest, and payments are seamless with the option to set up automatic repayments. PayPal Pay Later solutions appear in the consumer’s PayPal wallet, and they can manage their payments in the PayPal app.

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