eBay has introduced a Buyer’s Credit program through PayPal to better compete with traditional retailers. This innovative financing option allows buyers to spread the cost of eligible items into manageable monthly payments, making larger purchases more accessible.
This initiative benefits buyers, sellers, and eBay alike. Buyers gain access to credit options similar to those offered by brick-and-mortar stores, while sellers can attract a broader customer base by making their listings more appealing to those who may not have immediate funds. eBay ensures sellers are paid upfront, eliminating the need to wait for monthly payments. Buyers then make their payments directly to PayPal’s credit provider.
The Buyer’s Credit program features an APR of 12.9%. Buyers can finance purchases of $999 or more over 12 months, or $1,999 or more over 24 months. Interest-free options are also available for purchases of $199 or more, with terms of 3, 6, or 12 months.
The availability and attractiveness of credit offers depend on the seller, who can choose to subsidize better terms for buyers by paying a fee to PayPal. For example, a seller offering a 12-month interest-free promotion would pay 3.75% of the item’s cost to PayPal.
Essentially, sellers pay less when buyers accrue interest, and they cover the cost of interest-free offers. PayPal earns interest regardless, buyers gain access to credit, and sellers increase their sales.
Currently, Buyer’s Credit is automatically offered to buyers in the USA for items over $199. To apply, buyers simply click the provided link during checkout, which initiates a quick credit check. Upon approval, the purchase proceeds as normal, with the buyer receiving the item before making any payments.
eBay aims to “level the playing field” by enabling its sellers to compete with major retailers. Furthermore, the program promotes PayPal as a preferred payment method. By providing financing options, eBay anticipates increased sales and higher average transaction values.
Buyer’s Credit can be used anywhere PayPal is accepted, not just on eBay. PayPal describes it as “like a credit card – minus the card!” Users can make purchases using their email address and password, without the need for a physical card.
Now, with the Buyer’s Credit option available, finding the best deal on that coveted item has become even more exciting. This opens up opportunities to acquire expensive items that were previously out of reach.