Under pressure from Apple Pay Later, PayPal improves its buy now pay later offerings

Image Credit: Sagar Salva

PayPal's improved Pay Monthly service will allow customers to split purchases up to $10,000 into monthly payments over as long as two years.

The expanded options were announced by PayPal shortly after Apple revealed its own foray into payment plans through Apple Pay, to be launched with iOS 16 in the fall.

PayPal's new installment plan option will be available at checkout when the customer pays with PayPal, and subject to approval. Applications will be open for purchases ranging from $199 to $10,000, with plans split into monthly payments between six and 24 sums in total.

Pay Monthly will assess an interest rate with an APR of between zero to 29.99 percent, according to a report by Engadget.

PayPal's new plan option will join its existing "Pay in 4" service, which splits the cost in four payments to be paid over six weeks with no fees or interest costs.

Apple is preparing to launch its Apple Pay Later service that will work in a similar fashion to Pay in 4, which will be incorporated into Apple Pay checkouts.

Like with Pay in 4, Apple Pay Later is limited to purchases of up to $1000. However, while Pay in 4 gives the customer the option to split into four equal payments without the need for an approval, Apple will reportedly vet the customer before providing them with the option.

Apple will reportedly leverage fraud detection technologies paired with iCloud to approve an individual Apple Pay user for Pay Later.

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6 Comments

cpsro 3206 comments · 14 Years

About 1 year ago

Pay Later is weekly over 6 weeks--barely better than a month and hardly worth talking about--which doesn't compare to 6-24 months.

danox 2955 comments · 11 Years

cpsro said:

Pay Later is weekly over 6 weeks--barely better than a month and hardly worth talking about--which doesn't compare to 6-24 months.

Sounds like the new layaway. What next renting-leasing.

crowley 10431 comments · 15 Years

Gotta keep the little people spending

larryjw 1031 comments · 9 Years

cpsro said:

Pay Later is weekly over 6 weeks--barely better than a month and hardly worth talking about--which doesn't compare to 6-24 months.

Well, if you get paid weekly or bi-weekly, this gives buyers to ability to pay out of income rather than savings. This is still a useful feature.

I always pay out of income when I can, though I can afford to pay upfront for everything I purchase. I just make sense. And when the payments are automatically applied, buyers should never have to pay interest.

Compare this process with, say, buying appliances, or furniture. There, the stores offer no payments for a year -- while the interest builds up over that time. It's a loan with a high interest rate -- and the buyer gets screwed royally. You never want to pay interest, period; that's money directly out of your pocket.

jcs2305 1337 comments · 11 Years

larryjw said:

cpsro said:

Pay Later is weekly over 6 weeks--barely better than a month and hardly worth talking about--which doesn't compare to 6-24 months.

Well, if you get paid weekly or bi-weekly, this gives buyers to ability to pay out of income rather than savings. This is still a useful feature.

I always pay out of income when I can, though I can afford to pay upfront for everything I purchase. I just make sense. And when the payments are automatically applied, buyers should never have to pay interest.

Compare this process with, say, buying appliances, or furniture. There, the stores offer no payments for a year -- while the interest builds up over that time. It's a loan with a high interest rate -- and the buyer gets screwed royally. You never want to pay interest, period; that's money directly out of your pocket.

You only pay interest if you don't pay the balance within the time frame ( 6-12-18 mos etc.. ) then you pay the total interest from day 1. I have bought multiple TV's and appliances this way and have never paid interest. I buy a TV.. 12 mos no interest,, pay it off in 4-5 months. I make payments with income and don't have to put it all down up front. Same with paying the statement balance in full if I use a credit card. I refuse to pay interest and waste my money.