In the long run, I do think there will be some consolidation and I feel like PayPal will be well-positioned when that happens. So to answer your question, I feel like all the players are actually helping drive the demand and buzz, to which consumers are really becoming accustomed. PayPal actually welcomes the regulation as we’ve already taken steps that we feel will make our product resilient to any regulation - no consumer fees, no merchant fees, and we’re very upfront. If you believe some of the WorldPay reports, BNPL, as a share of e-commerce is expected to double between now and 2024 – so obviously, there are competitors who want a piece of that pie.īut I think with regulation, and pressure on the macroeconomic environment due to inflation and some of the funding of startups becoming less available, there will be consolidation in the industry – and there will be fewer players left standing at the end of the day. The players demonstrate that there is a lot of demand and a lot of opportunity to offer this product. Mikulcik: Certainly, there are a lot of players and I think it’s good and it’s bad. What are the ramifications of such a fast-growing industry that is becoming saturated? I spoke with Steve Mikulcik, VP of Global BNPL at PayPal, about the ramifications of such a fast-growing industry, and whether it is still serving the purpose of facilitating consumers given the current circumstances of mounting debt and soaring losses. Nearly 11% of users were charged at least one late fee in 2021, up from 8% in 2020, according to a Consumer Financial Protection Bureau report.Īdditionally, a new survey also shows that missed payments are on the rise at BNPL firms, with nearly 42% of BNPL consumers having made a late payment on their loan. However, amidst the continuing popularity of BNPL loans, late fees are becoming more common. The firm has managed this by providing flexible payment options to its existing wide customer base of brick-and-mortar stores and merchants that already use PayPal for transactions on their websites and apps.

65% of Americans were saving up for a bigger purchase and 79% were considering creating and maintaining a budget, according to the research.ĭespite competition from the likes of Klarna, Affirm, Afterpay, and Apple, PayPal has built a sizable footprint in the BNPL space in a relatively short time. The decision to branch out its BNPL offering came as studies were showing consumers’ rising interest in manageable and flexible ways of making payments when paying for larger purchases. Customers can then make monthly payments until the purchase price and interest are paid in full. ‘Pay Monthly’ consumers can divide the total purchase cost into monthly payments over a period of 6, 12, or 24 months, unlike the ‘Pay in 4’ model, where users have to settle payments for purchases over a six-week span.Īdditionally, the ‘Pay in 4’ program lets customers pay for purchases between $30 and $1,500, while the new program, ‘Pay Monthly’, allows consumers to make purchases between $199 and $10,000, with the first payment due one month after the purchase is made. PayPal users can choose an installment plan that suits them after the eligibility screening. PayPal entered the sector by launching its first BNPL offering – ‘Pay in 4’ – in 2020, and expanded its suite of products by rolling out another BNPL product, ‘Pay Monthly’, in 2022. As more and more big players continue to enter the BNPL industry, competition in the space is intensifying.

Buy Now, Pay Later (BNPL) gained ground in recent years as an alternative form of credit for online retail purchases.

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