PayPal launches ‘Pay After Delivery’, 14 days Interest-Free Loans

PayPal is always looking to improve the payments experience for its customers, bring value to them and make them want to use PayPal services more often. With rising competition from all sides of the payments industry, PayPal is trying hard to come up with new services and establish effective deals to stay more relevant to its customers and to the industry as a whole.

PayPal officially launched its ‘Pay After Delivery’ service. The company also announced new partnerships with Burger King, GoDaddy, and Cybersource. The new Pay After Delivery service lets PayPal users pay for goods up to 14 days after the purchase has been made. The spending limit on the purchases has been set at $10,000. To avail the service, customers simply have to provide PayPal with a valid bank account number.

While a customer can make purchases and pay later, merchants are paid immediately by PayPal. This signals that PayPal is basically offering a two-week loan to its customers and that too interest-free. This specific service was piloted in the U.K. last year and was also tested earlier this year in the U.S. PayPal has finally decided to give this service an official go-ahead in the market. PayPal can give this service a marketing push and offer it globally to its estimated 157 million customers across 203 countries. If this service gains early traction in the market, it could be showcased as a differentiator by PayPal to address the heightened level of competition in the payments market.

But an important thing to be noted about the service is that the money paid for purchases made doesn’t come out of your PayPal account. It actually comes out of your checking account linked with PayPal. The limit per purchase has been set at $10,000 but what if your linked account doesn’t currently have that much balance. This could create issues for the customer.

The new partnerships

The recent partnership with Burger King will enable PayPal to bring its ‘ordering ahead’ service to the U.S. PayPal already provides this service across McDonalds’ in France. PayPal has also collaborated with the app developer firm Tillster, the one which developed the Burger King app for iOS and Android. The app would enable fast food customers to order food before checking in at the outlet. The app will generate a one-time code and customers can pay for their meals using PayPal once they present the code to the cashier.

Speaking of other partnerships, the one with GoDaddy is to leverage GoDaddy’s new Online Store service. The Online Store service lets small businesses build their own complete ecommerce websites for accepting payments. As part of the deal, the PayPal Express Checkout button would come pre-installed on all these ecommerce websites. PayPal has partnered with and Cybersource to enable small businesses and enterprises to accept PayPal along with other payment services. PayPal would be made available to 450,000 online businesses through a single platform.