A new sofa, a high-quality TV or a powerful computer – many purchases with a relatively high purchase price can be easily paid in small installments. In addition to traditional bank loans, installment payments in the business are also becoming increasingly popular in financing. Here it is necessary to distinguish between loan agreements offered by the house bank through the dealer and “real” installments where no bank is involved.
Paypal has also been involved in this second segment recently. ” Paypal introduces installment payments “: So and so similar were the headlines in many newspapers and online magazines. Millions of Germans regularly use the payment service when placing orders in online shops, for example. Originally launched as an Ebay subsidiary, Paypal is now independent – and always looking for new markets. Now, the company wants to focus more on the growing demand for installment payments in Germany.
So the question arises: Can paying by installments with Paypal be a real alternative to the classic bank loan? Currently the answer must be (still) with a clear “no”. The offer is currently limited to a few online shops, mainly in the fields of electronics and home automation. Paypal itself is not the actual provider of installment payments, but the company provides only the platform for settlement ready. In truth, the customer arranges the payment in installments directly with the dealer. The option is therefore only for large, financially strong sellers into consideration, which are not dependent on the rapid receipt of the entire purchase sum in their account.
The consumer portal Financial Tip points to another aspect: the interest and fees for the “new” form of installment payments are comparatively high. Anyone who gets the credit for the planned purchase quite regularly at the bank, can usually secure significantly more favorable conditions. The installment payment via mouse click via Paypal may be so easy and convenient – the cheapest way of financing is certainly not.