PayPal’s ‘Pay In 4’ Expands Installment Credit Options For PayPal Users - pymnts.com

PayPal’s ‘Pay In 4’ Expands Installment Credit Options For PayPal Users - pymnts.com


PayPal’s ‘Pay In 4’ Expands Installment Credit Options For PayPal Users - pymnts.com

Posted: 31 Aug 2020 12:00 AM PDT

Capturing consumers online and getting them to convert to a buyer at the online checkout this holiday season will be both more complicated and higher stakes than ever before, Doug Bland, PayPal's senior vice president of global credit, told Karen Webster in a recent discussion. That's why, he said, that PayPal has today (Aug. 31) announced a new buy now, pay later product for PayPal users called "Pay in 4" which will be available to all merchants that accept PayPal as a payment option.

With Pay in 4, PayPal customers have an option to pay 25 percent of an item's price upfront, then pay the rest over six weeks through three equal payments. This program is for purchases between $30 and $600 and there are no interest charges or other fees (except for late fees if someone doesn't pay on time). For consumers, Bland said, Pay in 4 offers a near-ubiquitous online installment payment experience given PayPal's penetration of online merchants (79 percent of the top internet 100).

"What we continuously hear from businesses of all sizes is that they are looking for trusted ways to help drive sales [and] attract customers without taking on additional costs," Bland said. "At the same time, what we hear from our consumers is they are looking for flexible and responsible ways to pay when they shop. This has all accelerated during the pandemic, and this economic uncertainty has created additional stress for the retailers and for consumers."

Bland said there would be some credit evaluation before PayPal approves a customer. Still, because of the modest loan sizes, he said that PayPal expects to approve the vast majority of applicants.

"Given the challenging and uncertain times we're living in, we felt it was more important than ever to provide this solution to help retailers help consumers," Bland said. "And we're going to make it available [in] time for the upcoming holiday shopping season."

 Pay in 4 Aims To Meet Consumers' Growing Interest In BNPL 

Pay in 4 isn't PayPal's first foray into the world of installment payments. PayPal with PayPal Credit, Bland said, was an early alt point of sale (POS) credit pioneer a decade ago, well before the alternative online credit option was given the "buy now pay later" moniker and offers consumers an interest-free line of credit option with payments spread over a six-month window. Pay in 4 is PayPal's newest addition to its Pay Later portfolio of credit options for PayPal users.

But Bland said that consumers looking to control their spending are increasingly attracted to BNPL options that allow them to defer payments while providing transparency in how those payments are structured and how much it costs to opt-in to that way to pay.

"We can imagine that this will resonate with the younger demographics already favoring installment payments, but also all demographics who want to avoid paying credit card interest and who maybe also looking to stretch out their funds over a six-week period," he said.

Pay in 4 – Helping Merchants Boost Sales 

Bland said the benefit for merchants is that Pay in 4 provides another payment choice for PayPal customers who already like and use PayPal to make online purchases. Bland said that PayPal data shows that PayPal checkout conversions are 82 percent higher than checkout without PayPal. When businesses promote PayPal Credit, they see a 21 percent increase in sales and a 56 percent increase in order values.

"That's really important because if you think about the scale of PayPal, we have over 300 million consumers around the world, [and] certainly a big chunk of that is in the U.S. market," Bland said.

Bland also said that making Pay in 4 available to consumers is free to merchants: free of added integration hassle and costs since it is simply another feature inside of the PayPal wallet for consumers, and it is free to offer. Pay in 4, he said, costs merchants nothing above and beyond their existing PayPal pricing when a sale is made. Pay in 4 sales proceeds are paid in total when a sale is made.

Merchants To Help Drive Pay in 4 Awareness 

When asked how PayPal plans to promote Pay in 4, Bland said PayPal believes merchants will take the lead as they have a rather powerful incentive to boost sales, particularly given the current economic environment and during the traditional make-or-break holiday season.

That makes merchants, Bland noted, the best promotional channel they have for igniting the new service, as they should. Merchants have the best grasp on their customers' needs and wants and thus the most logical path to align their needs with the value proposition of the Pay in 4 installment option.

The Pay in 4 Path Forward  

Bland added that Pay in 4 is just the latest move toward the democratization of financial services that has motivated PayPal's expansions more broadly into the credit market. Those efforts include Working Capital for businesses and PayPal Credit for consumers.

He said the goal is to keep deploying tools to make commerce more engaging, easier to use and ultimately more rewarding for consumers and the merchants they like to shop. Based on early beta tests of the product, Bland said that he's excited to see it launch and scale in the U.S. — and soon other markets, as well- and in time for holiday 2020.

"The demand [so far] we've seen is remarkable — and across all categories of merchants — from the largest enterprise merchants to the smallest mom and pop shops. "

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LIVE PYMNTS TV OCTOBER SERIES: POWERING THE DIGITAL SHIFT – B2B PAYMENTS 2021 

Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border.

Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.

Grocery Roundup: Another Amazon Go Grocery Opens; Walmart Delivery Drones Take To The Skies - pymnts.com

Posted: 10 Sep 2020 12:21 PM PDT

This week was loaded with new moves, developments and shifting consumer patterns in the grocery business, with rollouts from Big Tech serving as the major theme. Amazon Go Grocery added a store in suburban Seattle, Walmart delivery drones took over the skies in North Carolina and cashierless checkout took another few jumps forward as more grocery chains embraced it.

Here are the week's highlights:

Amazon Adds A Go Grocery Near Microsoft Headquarters

The Seattle area is now home to another Amazon Go Grocery store, this one in the well-heeled suburb of Redmond (home to the Microsoft headquarters a short distance away). The new Go Grocery store is housed in a former Sears Auto Center.

Like Amazon's smaller Go convenience stores, Go Grocery sites allow customers to shop without stopping at a checkout stand. Instead, Amazon digitally monitors the shopping activities, so customers can just walk out and the technology will settle up with them on the back end. This touchless, literally no-contact payment method has become an increasingly desirable selling feature for Go in a post-pandemic world.

The new location reportedly expands beyond just offering general grocery items to include things like hot prepared food, ready-made meals and local "artisan" breads, cheese and baked goods, catering to the largely affluent shoppers who live near the new location.

The new store will also serve as a real-world pick-up location for online orders made on Amazon.com.

Walmart Drones Take To The Skies

Amazon isn't the only big name experimenting with out-of-the-box thinking on touchless transactions.

Walmart this week made its first leap forward into the world of drone-based grocery and household-item delivery as it launched a pilot program in Fayetteville, North Carolina, in partnership with drone startup Flytrex.

The drones can reportedly travel about six miles at a little over 30 mph and can carry 6.6 pounds of goods. According to Flytrex, the drones don't land to deliver goods, but gently lower packages into the customer's hands from roughly 80 feet up.

Flytrex has received approval from the U.S. Federal Aviation Administration to test food deliveries in North Carolina on the requirement that drones fly pre-filed delivery routes.

"We know that it will be some time before we see millions of packages delivered via drone," Walmart Senior Vice President Tom Ward said in a post on the company's blog. "That still feels like a bit of science fiction, but we're at a point where we're learning more and more about the technology that is available and how we can use it to make our customers' lives easier."

Walmart isn't alone in its drone ambitions: Amazon recently got FAA approval to operate its own drone "airline."

The Race To Embrace Touch-free Checkout 

While the Big Tech names tend to get all of the attention for innovation, there was evidence this week that players who are merely established but not gigantic are getting into the digitizing swing of things as well. For instance, CNBC reported that grocery chain Giant Eagle is offering a checkout-less experience in one of its stores.

The network also said the Price Chopper chain has set up a handful of Missouri stores so consumers can scan items with their phones and pay directly via an app. Similarly, Wegmans had been piloting a self-checkout app at three stores prior to the pandemic and has now rolled it out in 80 of its 103 U.S. stores.

"What people want is to get in and out fast," Giant Eagle CEO Laura Karet told CNBC. "It's all about speed. [Even] pre-COVID, we constantly challenged ourselves to say: 'How can we get people in and out of the stores more efficiently?'"

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LIVE PYMNTS TV OCTOBER SERIES: POWERING THE DIGITAL SHIFT – B2B PAYMENTS 2021 

Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border.

Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.

How Brands Can Turn B2B Buying Into A Positive Experience - pymnts.com

Posted: 14 Sep 2020 05:02 AM PDT

"The Amazon experience" is now a worn-out catchphrase in the world of B2B eCommerce.

As more manufacturers and other sellers migrate their sales strategies online, they're seeking to please online shoppers the same way Amazon has done for individual consumers.

But B2B eCommerce is not the same beast as B2C. Certain experience can, indeed, be replicated across a consumer-to-business shopping context, and end-goal in both scenarios for marketplaces is to please the online shopper. Yet as Justin King, vice president of B2B Strategy at Salsify, told PYMNTS, in order to optimize the B2B eCommerce experience, understanding the differences in what initiates the shopping must first be understood.

"The core difference between B2B and B2C is that in B2B, the individual researching and buying has a job to do," King said. "They didn't want to be there, necessarily — they have to be there. It is their job. On top of that, the buying cycle for B2B is often much more complex and lengthy, and involves many different decision makers, often with their own priorities."

For brands and their manufacturers, Amazon can be a powerful influence. But as King explained, these B2B enterprises must understand what corporate buyers need, and don't need, in order to provide a consistent and pleasing experience not only across their eCommerce channels, but across the traditional sales channels, too.

A Unique Experience

Brands and their manufacturers today continue to rely on legacy technologies and manual processes to sell products online, said King.

"Anyone in the business knows that this process is slow, clumsy and overly complex," he said, noting that Salsify has recently rolled out its Commerce Experience Management (CommerceXM) platform, a solution designed for brand manufacturers to bring the buying experience they yearn to give to the digital landscape.

The purpose, noted King, is for buyers to achieve a "consistent experience" regardless of their shopping setting. For corporate customers, "ease-of-use and utility" are No. 1 priorities.

"You must think, 'How can we make our buyers' jobs easier through eCommerce?'" noted King. "It's a small but fundamental difference in mindset between B2C and B2B digital transformation."

The payments experience is part of that. Today, paper checks continue to be the dominant form of B2B payment. Yet in order to optimize the B2B eCommerce experience, ACH and commercial card transactions need to be accounted for when building the online business shopper experience.

This is particularly true, said King, as a result of the global pandemic. As a result of work-from-home requirements, accounts payable (AP) professionals cannot be in the office to print and mail paper checks. King noted that with employees now forced to keep check stock at home, the friction of making payments after making a purchase online has elevated.

"Because of this shift to remote work, B2B organizations have been forced to leverage digital payments, simplifying the process," he stated.

Shifting Business Models

B2B payments aren't the only shift that the pandemic has initiated in the world of B2B eCommerce.

Changing business models have added extra pressure on the way brands sell across channels across business models. It's also accelerated the digitization of B2B sales.

King said that the rise of direct-to-consumer (D2C) has opened up opportunities for sellers to collect valuable data from their shoppers, pointing to Dawn Foods as one such customer of Salsify that has recently taken the opportunity to, as Dawn Foods explained, "connect with their customers and end-users, leaning their behaviors, and getting direct feedback."

Amid this shifting landscape, Amazon has once again emerged as a model to which B2B brands should pay attention.

King cited research from Salsify partner Enceiba, which revealed 70 percent of B2B manufacturers expect Amazon to emerge as a key player in the B2B commerce world in the years ahead.

"This is partially due to COVID," said King, "but also due to the fact that millennials now have an incredible influence on the B2B purchase cycle. They expect their business products to be listed on the same sites as their consumer needs, and B2B brands need to pay attention to that if they aren't already."

Overall, said King, B2B brands and their manufacturers have to be "nimble" in order to stay competitive. While the pandemic has indeed accelerated digitization and heightened both consumer and corporate shopper demands, many of these changes will be long term.

Digital sales models must also be ready for the unexpected. No one could have predicted the COVID-19 crisis and its impact on the world of B2B commerce, for instance, so any investment in digital will be beneficial for future-proofing sales in the long run.

And as King noted, B2B brands and their manufacturers need to think beyond the basics of digital commerce to not only meet "Amazon-like experience," but to also meet the unique needs of corporate buyers that require complex payment and ordering processes.

"It's not enough today to even have the right technologies and processes in place to handle the next pandemic," he said. "You have to make the investment in digital transformation today, and have the right internal mindset, to be able to handle any unforeseen circumstance."

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LIVE PYMNTS TV OCTOBER SERIES: POWERING THE DIGITAL SHIFT – B2B PAYMENTS 2021 

Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border.

Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.

Citi To Face Regulators' Rebuke Over Faulty Risk Management - pymnts.com

Posted: 14 Sep 2020 02:07 PM PDT

Regulators are expected to reprimand Citigroup for its faulty risk management system, which works to detect problematic transactions, risky trades and other such issues, and that has apparently sped up retirement plans for Chief Executive Michael Corbat, according to a report in The Wall Street Journal.

Corbat was expected to keep serving in his position for several more years, but will now be stepping down in February, Citi announced.

Citing sources, the news outlet reported that while regulators didn't ask Corbat to retire, the CEO came to believe the costly, years-long overhaul of the risk system would be a job best fit for his successor, Jane Fraser.

The reprimands expected from the Office of the Comptroller of the Currency and the Federal Reserve could impel the bank to come up with a plan to fix its risk system, which is affected by the firm's infrastructure. The issue is that Citi's various business arms, including for commercial banking, credit cards and corporate advisory services all run on their own individual systems, with different methods for tracking customers and transactions, the Journal reported.

That can mean a customer with multiple reasons to do business at Citi could find themselves with numerous different identification codes. Regulators require banks to track customers across all operations, with an eye toward catching crimes such as money laundering. The myriad of different systems Citi has in place could make it vulnerable to attacks, some sources said, according to the newspaper.

One example is the $900 million recently sent by mistake to a group of Revlon lenders, which Citi discovered was due to outdated software installed in the 1990s.

The consent order could require Citigroup to develop and execute a plan to fix its risk management system, though it's unclear what level of regulation or oversight there could be on that plan. In January, a Citigroup executive said there was a plan to hire 2,500 coders to help with the technology underpinning dealings with investment and corporate banking.

And in June, the hiring of Karen Peetz as chief administrative officer was intended to work on bank safety issues and, according to Corbat, bring more clarity to dealings with regulators.

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LIVE PYMNTS TV OCTOBER SERIES: POWERING THE DIGITAL SHIFT – B2B PAYMENTS 2021 

Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border.

Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.

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