Buy Now Pay Later

PayPal Launches Pay in 3 In The UK In Time For Holiday Shopping

There was already wide speculation before the pandemic about the U.S. economy’s future and how long the good times then underway could last.

Ten years of largely uninterrupted growth had experts wondering when the next bump would come. But Greg Lisiewski, PayPal’s vice president and general manager of consumer credit, told Karen Webster that while lots of people were trying to forecast the economy’s next phase, no one foresaw that a new virus would burn everything to the ground.

“No one was predicting the situation we have — finding yourself in the middle of what is hopefully a once-in-a-millennium-type pandemic,” he said. “I think it’s forced everyone to give up the belief that they have a crystal ball that will help them see exactly when and how all of this is going to end, given that it has led to a whole host of new consumer behaviors that would have been hard to forecast even six months ago.”

In the absence of knowing where consumers are going, retailers' best bet is to meet consumers where they are today, give them what they want and follow them along on journeys across channels, Lisiewski said. And in that spirit, PayPal is announcing Wednesday (Oct. 14) the latest global expansion of its new installment payment product in the U.K., called Pay in 3.

The How’s and Why’s of Pay in 3

Pay in 3 follows the launch of PayPal’s U.S. and French iterations (Pay in 4 and Paiement en 4x) in August and June, respectively. PayPal enters the U.K. market with a similar purpose in mind, Lisiewski noted, to bring PayPal tools and products to merchants to help them tackle the continual challenges of “growing sales and converting customers.”

Customers, he noted, that have particularly over the last year developed a genuine preference for being offered the option to pay in installments as they’ve sought to get greater control of their expenses, cash flow and spending overall in the face of economic uncertainty.

“We're excited to make it available a little bit up against the wire, but in time for holiday,” Lisiewski said. “[Pay in 3] gives consumers optionality based on what they're spending and giving them a chance to help make it match their cash flow.”

When we look back from the true post-pandemic future, Lisiewski said he suspects that there will be a few changes that come to the environment that will be permanent — one of which will be the persistence of point-of-sale (POS) financing offers for consumers.

“What PayPal is seeing today as it looks out over its consumer and merchant base is that that hunger in the market for point-of-sale financing products presents PayPal with a unique opportunity to really put a consistent, ubiquitous set of product types in the market in many regions,” Lisiewski said.

Taking on a Competitive Field

As PayPal eyes expansion for its new take on buy now, pay later, it enters a crowded field, Lisiewski acknowledged, but it enters with advantages. The first of which, he noted, is the scale of more than 300 million consumers and tens of millions of merchants worldwide that PayPal has spent decades building and securing trust on both sides of its platform.

Second, he noted, PayPal can bundle buy now, pay later options like Pay in 3 into the standard PayPal offering for merchants, meaning there is no heavy integration or a series of hoops to go through to get it up and running fairly fast for PayPal merchants.

And perhaps most critically, he noted, having buy now, pay later options as part of an overall PayPal payments experience removes a lot of what he called “the friction of uncertainty” from the buying process itself, making it easier for both the consumer and the merchant to progress toward the conversion they both want.

“What we have a chance to do is simplify the landscape from the consumer lens, so they don't have to wonder, ‘Well, if I go to a merchant, will I have this choice as opposed to if the go to a different merchant?’” Lisiewski said. “A PayPal customer will get to know that this choice is available essentially wherever PayPal is accepted, which to use a really geeky term, lessens the cognitive load.”

Consumers, he noted, have already been through a lot in the last half year. They’ve had to make many hard choices and think through a lot of quick pivots in their own personal lives as they’ve struggled worldwide to cope with an uncertain and unpredictable pandemic. And while PayPal can’t force things to go back to normal, predict when normal is coming back or foresee whether the next normal will even much resemble the old one, what it can do is make it easier for merchants and consumers to connect and transact using whatever payment mechanism works best for them at the time.

It’s an option that now increasingly includes buy now, pay later.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.