PayPal Credit kicks off in the UK

Paypal Credit is a service that lets consumers use their PayPal accounts to make online payments for goods as a replacement for traditional credit cards.

To incentivise this, the company is rapidly expanding PayPal Credit in the UK, which helps people make purchases even when they dont have the funds in their bank account. They will need to apply for the service online, and if they pass the companys credit check they can get zero percent interest on orders over GBP 150 for the first four months. That means PayPal wont charge a premium if one can pay back the money it borrowed within four months. Anything left over after this period will, however, be subject to a typical interest rate of 17.9 percent p.a (variable). PayPal is basing that figure on an assumed credit limit of GBP 1,200 -- both could vary depending on your particular circumstance. Furthermore, the four-month window isnt a one-time promotion, so consumers will be eligible for the scheme every time they order something thats worth more than GBP 150.

The place to buy from has to support PayPal and it could be a website or a brick-and-mortar store.
Also, PayPal has partnered with the following retailers to offer alternative instalment plans: Blacks, Chain Reaction Cycles, Dyson, Millets, Samsung, Simply Games and Ultimate Outdoors. Dyson, for instance, will give 14.9 percent interest over a six, 12 or 24 month period on orders over GBP 199. Chain Reaction Cycles, meanwhile, is offering zero percent interest for purchases as low as GBP 99, with either a 12 or 24-month plan.

Many companies, especially those making or selling luxury goods, already offer their own instalment plans. To be successful, PayPal will need to stay competitive with its own deals and interest rates, and continue to thrash out similar deals that can be picked up through its retailer partners. Amazon, for instance, has a similar scheme in the UK called Pay Monthly, however its only eligible for orders made through its own storefront.

PayPal Credit was available before, but in a limited capacity. It kicked off in the UK back in 2014, starting with what the company has described as a successful pilot. PayPals ambitions have grown since then though, teaming up with companies like Apple to offer zero-interest monthly payment plans.
The service is available nationwide, and with more retailers offering PayPal-exclusive instalment options.