Many people within us and around the world are put out of labor by the coronavirus pandemic. While many companies have allowed people to figure from home, some jobs that can’t be done remotely are forced to terminate or lay off workers. In addition, with people out of labor, some banks and MasterCard companies have eliminated late fees.
PayPal has now announced that it’s eliminating late fees globally for Buy Now, Pay Later products. Beginning October 1, new purchases using Pay in 4 within the US, Pay in 3 within the UK, and Pay in 4X in France won’t apply any late fees for consumers who miss a payment. PayPal has already eliminated late fees in its German and Australian markets, and therefore the change matches those offerings in its other major markets.
PayPal says consumers try to manage their budgets and are trying to find payment options with fewer fees. It points to a recent study that found 33 percent of consumers say no late fees are a serious consideration when choosing payment options. PayPal also claims no late fees benefit merchants.
The company cites metrics showing merchants who offer Pay in 4 see 50 percent of consumers make additional PayPal purchases using Pay later plans within three months of the prior purchase, and 70 percent make additional purchases within six months. The elimination lately fees don’t increase costs for merchants.
PayPal claims that offering Pay Later options increases cart sizes and conversion rates by the maximum amount as 39 percent. PayPal launched its Pay in 4 offerings in October 2020. It points to luggage company Samsonite, which adopted the payment offer shortly after it launched. PayPal reports Samsonite saw a 25 percent increase in average order value when customers chose PayPal Pay in 4.
