The payments giant will launch its buy now, pay later (BNPL) solution in Australia this June, per Reuters. The offering, dubbed Pay in 4, allows customers to pay for online purchases in four interest-free installments over a six-week period. PayPal’s BNPL offering first launched in the US in September 2020, with its UK debut following soon after. Pay in 4 transactions accounted for $750 million of volume in the US and UK at the end of December.
PayPal’s move into Australia could be challenging, considering the market is already dominated by a number of homegrown BNPL providers. Although the coronavirus pandemic helped thrust BNPL offerings into the global spotlight, the financing solution has long been popular in Australia: In 2019, the country was ranked No. 4 out of the top global BNPL markets based on consumer usage, per Worldpay. More recently, the number of BNPL transacting users in Australia climbed 25% to nearly 2 million users in June 2020, compared with the same period in 2019, according to the Australian Securities and Investments Commission. Local players Afterpay and Zip are dominating this booming market, with the former counting 3.4 million users across Australia and New Zealand as of its fiscal H1 2021 (ended December 31, 2020) and the latter counting 1.8 million users in the same regions based on the latest data available. With PayPal due to enter the market soon, it could face fierce competition from Afterpay, Zip, and other players that have risen in the market.
PayPal may be able to push past the noise and become a key player in the flourishing market thanks to its large user base.