Feedback: PayPal's split payment offer is a success

For several years now, PayPal has been expanding its credit offering by proposing a fractional payment offer, available in France since July 2020. Since then, the online payment giant has seen strong growth in this activity, which is proving to be a support for customer loyalty and a way to keep PayPal at the centre of their daily lives.

FACTS

• 18 million PayPal account holders have chosen the Buy Now Pay Later option since the service's launch, representing 4% of PayPal accounts.

• The web giant has seen a 256% growth in purchase volumes through its BNPL offering, equating to nearly $3.6 billion spent in the first quarter of the year. 70% of users of its split payment solution do so via PayPal's mobile app. And in the US, merchants who offer PayPal Pay in 4 are seeing an average 21% increase in sales.  

• More globally, PayPal currently has nearly 429 million active accounts worldwide, with 5.2 billion transactions recorded in the first quarter of 2022.

CHALLENGES

• Making its presence felt in the daily lives of its customers: PayPal's ambition was, among other things, to make its wallet an everyday tool for its customers. This is exactly what fractional payments allow, by integrating seamlessly into the customer's shopping experience, without friction, making PayPal a tool for facilitating these purchases on a daily basis. In terms of volume, PayPal estimates that customers who have installed its wallet on their phone make 25% more transactions on average.

• Continue to expand its offering: PayPal extended its fractional payment service to the UK in October 2020 and then acquired a Japanese specialist in the sector last September. Germany is also a country covered by this offer today. From now on, its ambitions are clearly geared towards extending this split payment offer internationally.

• Grabbing shares in a high-potential market: the global BNPL market is expected to reach 39.41 billion dollars by 2030, according to a new report by Grand View Research.

MARKET PERSPECTIVE

• PayPal's success is based on two pillars: its ability to offer a highly popular payment service and its adaptability to the e-commerce market. The latter was growing rapidly before the pandemic, but the pandemic accelerated its growth even further. By rebound, PayPal has benefited from this dynamism, as has its fractional payment offer.

• In France, moreover, the new edition of the BPCE Digital & Payments Barometer has just confirmed the boom in e-commerce and online payments. The analysis is based on the anonymised transactions of around 20 million bank cards issued by the Banques Populaires and the Caisses d'Épargne. It reveals that 2021 was another record year for e-commerce:

• 1/3 of consumption takes place online for the under 35s,

• the average e-commerce basket is almost half as high online as in-store (at 57 euros compared to 38 euros),

• the share of spending done online is 85-95% for travel and airline tickets; 75% for education services and 98% for dating,

• One in three clothing purchases is now made online.