PayPal brings its “buy now, pay later” offer to busy Australia

SYDNEY (Reuters) – PayPal Holdings Inc to launch its “buy now, pay later” (BNPL) option in Australia this June, the US payment giant said Wednesday, pushing further into Afterpay Ltd and others for its share in the strong industry. expansion.

So far, PayPal’s new BNPL option has been rolled out in the US and UK, where by the end of the December quarter it said it had handled more than $ 750 million in transactions.

The US payment giant now plans to offer its interest-free “Pay in 4” service to its more than 9 million customers in Australia, where regulation of the fast-growing space is poor compared to other categories of consumer finance, while the adoption is superior to other markets.

PayPal’s arrival presents a serious new competitor for Afterpay and Zip Co Ltd, which lead the domestic market, as well as Sweden’s Klarna which is backed by a small shareholding. from Australia’s largest bank.

Andrew Toon, PayPal Australia’s chief executive of payments, told Reuters the company had been “inundated” with inquiries. from Australian traders and companies after the offshore launch of its BNPL service last year.

PayPal planned to capitalize on its long-standing relationships with Australian merchants, but not to the point of seeking exclusive deals that would boost other BNPL suppliers, Toon added.

The company’s initial announcement last year that it would join the BNPL industry raised concerns among investors and analysts that its deep network with retailers and lower merchant rates could impact incumbent growth.

“The big question is whether (PayPal) gets incremental sales as in a potentially different customer base, or just steals shares. from incumbent, “said Steven Ng, co-founder and senior portfolio manager of Ophir Asset Management, which owns Afterpay shares.

Shares of Afterpay, which have been beaten by the global tech sell-off in recent weeks, rose more than 8%, while Zip fell 3.6% towards the end of the trading day.

“You shouldn’t underestimate the reach and technological firepower Paypal has in competing with existing players,” Ng said, adding that the competition will see further innovations and BNPL will gain a larger market share in the payments industry overall.

Reportage by Nikhil Kurian Nainan in Bengaluru and Byron Kaye in Sydney; Editing by Christopher Cushing