PayPal is launching its new buy now, pay later service in the UK, offering credit for purchases of up to £2,000 in any store which uses the payment method.

PayPal Pay in 3 will be available to customers ahead of the peak fourth quarter shopping season. The payment plan allows people to pay for any purchase between £45 and £2,000 in three interest-free instalments, from any retailer which uses PayPal.

PayPal is used by 79 per cent of the most popular 100 online retailers, giving it a huge advantage as it moves into a market currently dominated by the likes of Klarna and Laybuy.

Customers who choose the payment plan will have the amounts deducted from their PayPal accounts or connected bank accounts automatically every month, and can manage payments via the PayPal app.

In September, PayPal launched its Pay in 4 service in the US, but this is the company’s first foray into the UK sector.

“During the Coronavirus pandemic, we have seen the number of people in the UK shopping online increase dramatically,” said Rob Harper, UK director of enterprise accounts at PayPal. “At the same time, many more consumers are looking to spread the cost of those purchases.

“We have developed PayPal Pay in 3 to meet that need, building on our heritage as a responsible lender through PayPal Credit, which we launched in the UK in 2014, and has served more than two million customers to date.”

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