August 18, 2021Blog Posts

PayPal drops BNPL late fees worldwide

Payments Dive

  • Starting in October, new purchases in the U.S. made with PayPal’s buy now-pay later option won’t have any late fees if a consumer misses a payment, the company said in a press release today. Currently, late fees in the U.S. range up to $10 per missed payment, a spokesperson for PayPal said by email.
  • The PayPal service, which lets U.S. consumers pay for a purchase in four installments, is interest-free to the users and any charges for merchants are tucked into their existing PayPal rates (so no extra charges for BNPL). PayPal makes money on the service, as do the merchants, because they’ve documented increased sales with the BNPL tool.
  • The company is also jettisoning late fees on purchases in the United Kingdom and France in October, making a clean sweep of the penalties worldwide, the spokesman said. It never had late fees for purchases in Germany and Australia.


New research from The Strawhecker Group analyzes key trends and consumer attitudes.

Download a free infographic covering several findings from the full report.

Consumers have increasingly adopted Buy Now, Pay Later (BNPL) services for multiple reasons; a desire for financial flexibility, a way to avoid incurring credit card debt, or to purchase items outside of their budgets. However, despite its popularity, consumer debt and missed payments have led to calls for additional research and regulation. Read the press release.

To take a closer look, The Strawhecker Group (TSG) conducted a survey of over 1,500 U.S. consumers in early 2021 with the goal of understanding domestic attitudes and perspectives on the use of BNPL services. The complete findings, a selection of BNPL provider profiles, and market landscape details can be found in the firm’s new report Buy Now, Pay Later: An Analysis of Key Trends and Consumer Attitudes.

Highlights of this extensive 81-page report include:

  • Buy Now, Pay Later Background
  • Key Players in the Buy Now, Pay Later Space
  • Buy Now, Pay Later Consumer Survey
  • Concluding Thoughts: The Future of Buy Now, Pay Later
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