PayPal to Offer Interest-Free Installment Loans

PayPal Holdings  (PYPL) – Get Report said on Monday that beginning early next quarter, it would offer no-interest installment loans to consumers, an effort to compete with smaller companies like Klarna and Afterpay. AFTPF 

“Pay in 4, a short-term installment offering for customers in the U.S., can help merchants drive conversion, revenue and customer loyalty without taking on additional risk or paying any additional fees, while enabling consumers to make a purchase and pay over four interest-free installments,” PayPal said. 

The loans will apply to purchases between $30 and $600 over a six-week period. Consumers pay no fees. Pay in 4 will appear in consumers’ PayPal wallet, so they can manage their payments in the PayPal app.

Last month, PayPal reported strong second-quarter results. The company reported a 22% increase in revenue to $5.26 billion, with earnings up 49% to $1.07 a share. Analysts were expecting revenue of $4.99 billion on earnings of 88 cents per share.

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