eBay’s (EBAY) PayPal said today it would begin offering credit financing with General Electric Co.’s GE Money Bank. The new PayPal service, called PayPal Pay Later, allows online merchants to offer a credit account with flexible financing options such as no payments for 90 days. Merchants will not pay any additional fees, but will pay the regular PayPal processing fees.
Research commissioned by eBay showed that 56 percent of PayPal customers are more likely to buy from a retail site if a deferred payment option is available, eBay said.
This is an interesting development in the online payment services battle. Amazon (AMZN) just announced they’re entering the space with their own payment system. So, this news ups the ante between PayPal, Google Checkout and Amazon Payment.
Retailers who don’t take advantage of this may be missing out. We’ve seen the success that offering a deferred payment options has brought to several retailers we’ve worked with. To see a great example of how this deferred payment is being used by a retailer, check out Ice.com.