PayPal today announced the launch of PayPal Pay in 4 in Australia as it seeks to claw back market share from local sector leaders like Afterpay and Zip. The company says it will provide an interest-free buy now, pay later solution to consumers at no additional cost to PayPal business customers, beyond their existing account arrangements.

The new buy now, pay later (BNPL) solution is designed to give consumers greater choice and flexibility in how they pay and help businesses adapt to changing consumer expectations. The company, which has over 9 million active accounts in Australia, will roll out the BNPL solution to its Australian customers in early June 2021, ready for use by the end of financial year sales.

The service will be accessible to consumers in two ways. When a consumer pays using the standard PayPal button, it will appear at checkout in the PayPal wallet as a payment option. Businesses can also present PayPal Pay in 4 as a distinct payment option on their web site. As PayPal Pay in 4 is a payment option in the PayPal wallet, it will be available for consumers to use at hundreds of thousands of Australian, and millions of global businesses, where PayPal is accepted.

The company says the trusted security and protections offered by the PayPal platform will apply for transactions made using PayPal Pay in 4. Eligible purchases will be covered by PayPal’s Buyer Protection, meaning that if a product does not arrive PayPal can refund the full purchase price, including delivery. “Businesses will benefit from PayPal’s advanced decisioning process to prevent fraud while underwriting shoppers, and they will be covered by PayPal’s Seller Protection for eligible transactions,” according to a company statement.


Andrew Toon, General Manager, Payments, PayPal Australia, said “Australian consumers are looking for more choice and flexibility and PayPal Pay in 4 gives them yet another way to purchase securely using PayPal. PayPal’s digital wallet is the only solution that provides multiple ways to pay all in the one place — instantly with debit or credit card; 21 days later with our Pay After Delivery option; and now in four interest-free instalments using PayPal Pay in 4.

“Our Australian business customers have been requesting buy now pay later functionality from us, and we’re excited that we can offer PayPal Pay in 4 to them at no additional cost.

“Shopping habits are changing at an unprecedented rate, and during the pandemic we saw more than two million Australians start shopping online for the first time. We will continue to support Australian businesses of all sizes to adapt to rapidly changing consumer behaviours by evolving our service to meet their needs.”

For PayPal business customers, the service is automatically included with PayPal Checkout integration and Braintree integrations that use PayPal’s latest JavaScript Software Development Kit.

With a single integration, PayPal business customers can also add PayPal Pay in 4 messaging to their site, so consumers are aware of their flexible payment options. A messaging service will dynamically show the individual instalment amounts based on what the customer is browsing or purchasing, so consumers will know what each payment will be. This dynamic messaging can be presented early in the shopping journey, delivering relevant, in-context pay later options from the homepage to product pages, to checkout.

Consumers will be able to split eligible purchases from $50 to $1,500 over four equal, interest-free instalments, with automatic re-payments drawn every two weeks. No fees are charged when payments are made on time.

PayPal business customers and partners can learn more about PayPal Pay in 4 and register their interest on the PayPal Australia web site.

According to Grant Arnott, Managing Director of Power Retail, “PayPal is entering the market with an automatic merchant base while others have had to work hard to steadily grow this, especially Klarna and Humm.”

He said there was good news for retailers in the announcement. “PayPal will be charging merchants for its BNPL service through standard merchant charges (2.6% plus 30c per transaction) and this will put pressure on other BNPL providers (some of whom currently charge up to 7% on top of transaction fees) to offer better terms. ”

Arnott said that while PayPal is slow to enter, it will benefit from the fact that consumers are now far more comfortable with BNPL.

“Their offering will speed up consumer adoption of BNPL as a payment option and increase conversions for retailers.”

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