Consumers can now choose from a range of promotional finance offers in the online payment system Pay Pal who provides interest-free installment loans to cover the price of their purchase. Terms vary – although they typically range from 6 to 12 months – but they all have one thing in common: They tend to be associated with larger ticket purchases and minimal spending.

What PayPal Credit has learned from talking to its customers and merchants – and reviewing their spend data – is that these minimum spend floors are often too high for their customers, said Susan Schmidt, U.S. vice president of credit at the PayPal consumption, at PYMNTS.

Today (September 18), and Schmidt says, just in time for the 2019 holiday shopping season, PayPal is rolling out a new promotion that will allow its merchants to offer PayPal Credit customers interest-free installment financing for everything. purchase of $ 30 or more. Called Easy Payments, the promotional finance offer will give customers with a basket ranging between $ 30 and $ 99 the opportunity to finance that purchase interest-free for three months. Beyond that amount, Schmidt noted, PayPal Credit customers can use PayPal Credit’s previously existing funding plan – which extends interest-free payments over six months.

“Easy Payments will work very well as an installment loan, except that it is based on an existing line of credit,” explained Schmidt, “We have had a version of this feature available for years – our focus here is how to are we making a smooth and fast experience that is beneficial for merchants and consumers. And so far, the response from merchants has been overwhelmingly positive. “

How it works and for whom it works

Schmidt said a large portion of PayPal credit transactions were for purchases under $ 99, demonstrating that “there is clearly activity here. Additionally, PayPal Credit tends to serve more near-privileged customers. than others of their size – instead of focusing entirely on privileged and super-prime consumers. This means offering a interval funding options – in terms of both products and the types of transactions they can re-leverage – is especially important to how PayPal designs products.

“We care a lot about the democratization of financial services. We see PayPal credit as a way to provide access to credit in other places where it might not otherwise be available, ”Schmidt said.

On the front – the consumer experience for PayPal’s new installment loan offering is similar to what Schmidt says the customer is experiencing today with a twist. As consumers shop, their basket reflects both a total price and the monthly price of their entire basket.

When checking out, the customer can select the payout option and they are done. Since the offer is for PayPal Credit customers who have already been approved for a line of credit, there is no additional application process.

On the backend, Schmidt noted, adding the functionality isn’t much more technically complicated – as it’s built from a merchant’s existing integration with PayPal Credit.

“It’s literally as easy as copying and pasting a single line of code into this existing integration,” she said, noting that once activated, PayPal Credit manages the consumer’s reusable digital line of credit on the backend while the merchant is just paid. in its entirety when the transaction is complete – barring a chargeback – which, she noted, is handled in exactly the same way they would be with a regular PayPal purchase.

Merchants participating in the pilot, Schmidt told PYMNTS, reported seeing increased basket sizes.

This is why Easy Payments is rolling out for the holidays, but will not be limited to them.

The seasons and beyond

When forced to predict the 2019 vacation, Schmidt noted that in many ways she expected to see the trends of the last vacation season or both manifest this year – likely in a more exaggerated form. . This means the shopping season creep is set to continue – and possibly even progress into 2019, so holiday deals may well be on the shelves, especially digital ones, long before Pumpkin Spice is even out. off the menu.

That’s why, Schmidt noted, PayPal so quickly released this holiday shopping promotion to the general public so early. It will start to look a lot like Christmas sooner than expected, and PayPal merchants should be ready.

However, Easy Payments, she said, will not only come early, but will also stay late, more likely than permanently.

Its current form, she noted, could change. Seeing the program out in the wild and in mass circulation over the next 18-24 months, she noted, will give them plenty of advice on what else the offering needs.

“Our point of view is that we will learn from merchants and customers and that we will probably make adjustments in the future in an effort to optimize the experience for both parties.”