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PayPal launches interest-free payment scheme

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PayPal customers will be able to split purchases into three interest-free instalments as part of its ‘Pay in 3’ scheme.

As part of the Klarna-style buy now pay later option, shoppers will be able to use the payment scheme to split the cost of purchases between £45 and £2,000 in three amounts.

The first payment will be made at the time of purchase with the next two payments each month on the same date.

‘Pay in 3’ plans will appear in the PayPal digital wallet as a ‘pay later’ choice when customers select to pay via PayPal at the checkout. It is available at most retailers that provide PayPal at checkout.

PayPal said it is integrated into a customer’s PayPal account, accessible online or via the PayPal app. Customers will receive an email or SMS to notify them when the next payment is due. Missed payments will result in a £12 fee.

Rob Harper, director of enterprise accounts at PayPal UK, said: “PayPal Pay in 3 is now available via the PayPal wallet meaning that over 24 million customers can take advantage of this new way to pay in the UK. Our newest payment option offers shoppers even more choice and flexibility when buying online; something we know is at the forefront of the nation’s mind, given the rise in online shopping and unprecedented change in consumer habits this year.

“We’ve seen a significant growth in interest towards buy now pay later payments, with figures showing that it’s the UK’s fastest growing online payment method. Our new payment method builds on PayPal’s heritage and trust to enable a responsible and flexible way for consumers to shop.”

As well as the PayPal Pay in 3 scheme, from 16 December anyone with a PayPal account they haven’t used for a year will be charged a £9 inactivity fee.

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