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PayPal Pay in 4: What Business Owners Need to Know

PayPal Pay in 4: What Business Owners Need to Know

PayPal Pay in 4 has proven to be yet another winning, innovative idea for the eCommerce titan.

Customers love it, so, predictably, business owners from all across different industries have been quick to adopt it, too.

But is PayPal Pay in 4 a good fit for your eCommerce website?

What Is PayPal Pay in 4?

PayPal Pay in 4 is a fairly self-explanatory service.

It’s a “Buy Now, Pay Later” (BNPL) feature that allows customers to pay what's in their shopping cart in four easy installments – instead of all at once.

PayPal introduced the new option back in 2020, which added to its other “Pay Later” offerings: Easy Payments and PayPal Credit.

As opposed to offering installation payments the way a credit card would, PayPal Pay in 4 promises customers won’t have to deal with:

  • Late Payment Penalties
  • Interest
  • Impacts on Credit Car Score

(Also, that last element is a HUGE benefit that customers love – which we’ll cover in more detail a bit later)

And thanks to the popularity of PayPal, the option is widely accepted all over the Internet and even at many in-store locations. We’ll cover some of the more popular names that accept PayPal Pay in 4 in just a moment.

How Does PayPal Pay in 4 Work?

The name pretty much says it all, but let’s dig into the details about how PayPal Pay in 4 actually works.

Customers make the first of their four payments upfront at the time of purchase with the other three coming due every two weeks. So, in total, customers pay off their purchases in just six weeks.

For example, if you elected to use PayPal Pay in 4 when purchasing a product that costs $100, you’d pay $25 of it right away at checkout.

Then, in two weeks, you’d be charged another $25.

Two weeks after that, you’d pay $25 again.

And then the final $25 would be due two weeks later.

Pretty simple, right?

Can Anyone Use PayPal Pay in 4?

Anyone with a PayPal account can make purchases using Pay in 4.

Again, this is what makes PayPal’s version of BNPL so popular. Just about everyone has a PayPal account and just about every eCommerce store accepts PayPal payments. In fact, as of 2021, there are about 426 million PayPal users all across the planet.

Does PayPal Pay in 4 Have a Limit?

Yes, PayPal Pay in 4 does have limits. Customers are eligible to use it for purchases between $30 and $1,500.

What Happens if a Customer Misses One of Their Payments?

If a customer signs up to pay in four but misses any of their payments, PayPal will no longer extend the BNPL option to them until the amount is paid. Customers who wait too long to do this may even find they lose access to all of PayPal’s services until that balance is paid off.

That being said, PayPal does recommend that customers contact them if they believe they won’t be able to make an upcoming Pay in 4 payment to discuss possible options for avoiding these outcomes.

Does PayPal Do a Credit Check Before Offering Pay in 4?

As we mentioned earlier, one of the benefits for customers who want to Pay in 4 with their PayPal purchases is that taking advantage of this luxury doesn’t hurt their credit score at all.

PayPal does do a soft inquiry that will show up on the customer’s credit report, but that doesn’t negatively affect their score in any way.

What Business Owners Need to Know About PayPal Pay in 4

Now that you better understand how PayPal Pay in 4 works, the question becomes, “Will it work for your business?”

In short, the answer is a resounding, “absolutely.”

Here are 5 reasons you should start taking full advantage of PayPal Pay in 4 right away:

1. BNPL Skyrockets Conversion Rates

Unsurprisingly, if you make it easier for customers to afford products, they’ll be more likely to buy them.

Sure, discounting your products might help, but that strategy has some obvious disadvantages.

Instead, why not make your items more affordable by letting your customers buy them over the course of four smaller payments?

You’ll sell more without sacrificing any profits by offering discounts.

And as it turns out, smaller payments really add up for the companies that offer them.

According to RBC Capital Markets, “point-of-sale loans” – a common descriptor for features like Pay in 4 – increase conversion rates by 20% to 30%!

That’s A LOT.

And yet, when it comes to PayPal Pay in 4, your company doesn’t have to spend A LOT in order to see much better conversion rates.

2. Offering BNPL Will Help Decrease Your Cart Abandonment Rate

Shopping cart abandonment is a serious problem for almost every eCommerce company.

After all, you spend a lot of time and money ensuring your website attracts traffic and directs it to the checkout page.

So, nothing is worse than seeing a significant amount of those customers leave during the final step without spending a dime.

Offering customers the option to check out as guests will help drop a high cart abandonment rate, but it turns out that offering BNPL is a highly-effective strategy, too.

3. PayPal Pay in 4 Is One of the Easiest Ways to Increase Average Order Value

Increasing your conversions and dropping your cart abandonment rate are big enough advantages by themselves, but PayPal Pay in 4 takes it even further.

That’s because BNPL can help grow your average order values (AOVs), too, which means you don’t just get more conversions, you get more revenue from each conversion, too.

When PayPal commissioned a study on BNPL, they found that:

“24% of consumers also said they could shop for more expensive items based on the availability of BNPL options. The Forrester research echoes this, with younger consumers reporting they use BNPL to finance big-ticket purchases. Seven in 10 said they’re likely to use it for large items like furniture or other purchases over $1,000.”

This makes it pretty clear that if you want to sell more high-priced products, the easiest way is to let your customers use BNPL options like PayPal Pay in 4 that break those larger amounts into bite-sized payments.

4. You Still Get Paid Right Away

PayPal Pay in 4 really is a win/win for all parties involved.

Your customers have an easier time affording the things they want while you see higher conversion rates, larger average order values, and fewer abandoned carts.

BUT you don’t actually have to wait to get those four payments.

PayPal provides you with the total purchase amount right away. As we touched on above, if the customer doesn’t end up paying their total, it affects PayPal’s profit margins – not yours.

5. BNPL Is Becoming the Norm

It might be a relatively new development, but BNPL definitely isn’t going anywhere anytime soon.

In fact, in 2021, its growth skyrocketed by an incredible 215% from the year before. By March of that year, 50% of Americans had already used a BNPL service, too.

And going back to that study PayPal commissioned on the growing popularity of BNPL, the research found that:

“…among consumers between ages 18-39, 28% were more likely to shop at a merchant again if it offered a BNPL option, and 32% would make purchases they would’ve otherwise postponed.”

So, not only is BNPL catching on across all age groups, but it’s growing into the norm that younger consumers are coming to expect. This ensures that BNPL will become the standard for eCommerce websites – a payment option that future generations will demand.

Of course, that doesn’t mean EVERY BNPL service will stick around, which is why it’s so important you implement the best option.

Fortunately, it’s pretty clear which platform reigns supreme…

5. PayPal Pay in 4 Is the Most Popular BNPL Option

While we’ve spent a lot of time covering the many benefits of BNPL, it’s important to appreciate that there’s a big difference between PayPal Pay in 4 and all the others.

As the aforementioned research discovered, among Gen Z and Millennial consumers, “PayPal is the most trusted BNPL brand.”

Given how popular PayPal is across EVERY generation, this isn’t hard to believe.

But as you can see from their graph below, the difference between PayPal Pay in 4 and the competitors’ BNPL options is MASSIVE.


So, while BNPL could make a big difference for your business, it’s pretty clear that PayPal Pay in 4 is capable of making the BIGGEST.

Is PayPal Pay in 4 Secure?


PayPal has always been considered extremely safe.

The company didn’t become one of the most recognized brands in the world without investing in some heavy-duty security features for its payment processor.

And those same security features protect customers using PayPal Pay in 4, too.

Customers’ payment information is still kept under digital lock-and-key. Transactions are monitored 24/7 and protected from prying eyes with encryption.  

If a customer doesn’t receive your product or believes it wasn’t as advertised, PayPal will refund their purchase – including any shipping costs. Some terms and conditions apply, of course, but this reassurance has always gone a long way toward inspiring customer confidence in PayPal.

How to Add PayPal Pay in 4 to Your Website

Adding PayPal Pay in 4 to your website couldn’t be easier.

The company published this user-friendly video to walk you through the steps:

But you can also enjoy the many perks of PayPal Pay in 4 AND leverage the advantages of a world-class eCommerce checkout page by adding Dominate Checkout to your website. We actually partnered with PayPal when we created this powerful checkout solution, so it comes ready to offer Pay in 4 out-of-the-box.

We have options for every major eCommerce platform:

So, not only will you enjoy all the benefits of offering your customers Pay in 4, but you’ll also be able to leverage the full power of our profitable checkout extension – for FREE.

AND only our checkout extension will let your customers use PayPal to make purchases using their Venmo accounts on desktop. That’s one more big way Dominate checkout helps companies improve their conversions without increasing their overhead.

What Other Stores Accept PayPal Pay in 4?

Given all of the advantages of PayPal Pay in 4, it’s not surprising that so many companies give their customers the option to use this BNPL option.

Here are just some of the many businesses that offer it at checkout:

  • Adidas
  • Amazon
  • American Airlines
  • Apple
  • Best Buy
  • Calvin Klein
  • Delta Airlines
  • eBay
  • Etsy
  • Foot Locker
  • Hewlett-Packard
  • iTunes
  • Microsoft
  • Nautica
  • Netflix
  • Pandora
  • Target
  • Under Armour

It probably won’t be long until Pay in 4 is as ubiquitous as PayPal itself.

Is PayPal Pay in 4 Right for Your Business?

PayPal Pay in 4 has become one of the most popular new additions to websites in the last few years. As you just saw, this feature has been highly effective for business owners across a number of different industries.

If you’re not already using PayPal to improve your conversions and revenue, it’s absolutely worth considering. Our checkout products make it easy to leverage its many benefits right away, too – including Pay in 4.

We also wrote a post comparing the pros and cons of PayPal and Stripe if you’d like to consider another very popular payment processor.

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