PayPal expands small-biz installment payments to France

PayPal has launched a new online installment lending product in France geared to serving small and medium-sized businesses.

Currently, point-of-sale installment lending programs in France are mostly limited to large retailers, making the new PayPal offering a product that can cater to customers’ shopping at smaller retailers’ online websites. The program allows approved customers to split their purchases into four equal installments over three months, nearly anywhere PayPal is offered in France. Customers who apply for the installment program at time of purchase will receive a credit decision almost instantly. PayPal says that its offering is available in France on thousands of merchant websites.

“PayPal is one of the first companies to provide installment solutions for small businesses in France. There are no additional fees or integrations for the merchant, and the merchant gets paid up front,” said Doug Bland, senior vice president and general manager of Credit at PayPal, in a blog post.

Unlike credit cards or other common “buy now, pay later” programs, the PayPal Credit offering in France does require a customer to make an immediate payment at time of purchase — 25% for items between €100 - €2,000 (about $113 - $2,250). The remaining 75% of the purchase is split over a three-month period.

According to the terms and conditions on the French PayPal website, credit is offered over a three-month period for a fee, paid by the consumer, of 2.1% of the amount of the transaction, with a cap of €20 (about $23). Early repayments are allowed with no penalty. PayPal does offer a purchase protection program if the customer does not receive the order or if it does not arrive as described on the website or is damaged.

Additionally, in order to apply for the installment program an applicant must already have a PayPal account with a valid bank card linked to it for purposes of transferring the funds for payments during the duration of the credit offering.

The product, according to PayPal’s French website, is available only online and requires a customer to check if both the merchant and the particular purchase is eligible. The program is displayed on the PayPal app as “Paiement en 4X” (translated as 4X Payment).

In 2014, PayPal expanded its Credit offering in the U.K. and reached over €2 billion (about $2.25 billion) in lending in 2019. In 2016, PayPal Credit expanded into Germany and now serves 23 million PayPal customers in that country.

PayPal has doubled down on digital sales amid the COVID-19 pandemic. In May, PayPal raised $4 billion in 10-year bonds to fuel its global expansion efforts.

The PayPal credit offering could be particularly attractive to young, male online shoppers as they tend to request higher digital installment credit lines. According to Divido’s Global Lending Report, men on average ask for larger credit lines than women when making purchases at digital POS checkouts, particularly in the 20-25 and 35-40 age groups.