Though PayPal has offered a number of other consumer credit programs over the years that will continue to exist, the company’s new Pay in 4 option in the US lets it offer interest-free instalments, which have become increasingly popular through companies like Klarna and Afterpay that also let online shoppers split purchases into four pieces, argues marketwatch.com.
PayPal representatives have stated that the company’s service is differentiated in part because it will come at no additional cost to PayPal merchants beyond the typical fees that these sellers already incur for the company’s traditional payment processing services. Klarna and Afterpay charge fees to merchants for their instalment offerings.
PayPal will still make credit-risk decisions and sometimes do soft credit checks, which don’t affect customers’ credit score, as part of its risk assessment, but officials from PayPal said the company will also lean on its advanced analytics in determining whether or not to allow access to the Pay in 4 option for a given transaction.
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