Earlier today, PayPal introduced its new service Pay Later which directly competes with 14 Commerce Inc's Pay Me Later, allowing participating e-merchants to offer credit financing through General Electric's GE Money Bank. The service offers financing options, such as no payments for 90 days to all buyers, even those who don't have PayPal accounts. This smart move serves as the latest in a string of efforts intended to expand PayPal's non-eBay-related presence in the online marketplace and to strengthen its brand as a full-service payment company.
Pay Later should be good for business -- and not just for PayPal. A recent survey coneducted by Northstar Research Partners found that 56 percent of PayPal users are more likely to make an online purchase if a deferred payment option is available.
Until now, Bill Me Later has been without competition in the arena of buyer credit for online payments. Although PayPal's new service is remarkably similar to BML and the rates are competitive, PayPal trumps 14 Commerce by offering promotional financing to merchants of all sizes, not just large retailers.
(Paypal Image by Colin Zhu, CC 2.0)