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PayPal Pay in 3 review: What is it and how does it work?

Split your shopping basket in three with PayPal’s buy now pay later scheme. Here’s how to apply and where to use it.

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Georgia-Rose Johnson

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In 2021, PayPal scrapped late payment fees on its buy now, pay later service, Pay in 3, to help it compete with the likes of Klarna and Clearpay. So is PayPal Pay in 3 worth considering? Our review covers what you need to know.

What is PayPal Pay in 3?

PayPal Pay in 3 is PayPal’s buy now, pay later service that lets you split your online shopping basket into three interest-free manageable payments.

PayPal says you can use PayPal Pay in 3 for eligible shopping cart amounts between £30 and £2,000 at most online retailers that accept PayPal.

How does PayPal Pay in 3 work?

At the checkout, just choose to pay with PayPal, log in to your PayPal account and you should then see PayPal Pay in 3 as one of the available payment methods. After selecting it, you can apply for a PayPal Pay in 3 plan, get an instant decision and finish checking out.

You’ll need to pay the first instalment at the time of purchase and then the two following payments will be on the same date in the two subsequent months.

Features of PayPal Pay in 3

  • No fees. PayPal is free to use. If you’re late with a payment, the late payment fee is £0.
  • Zero interest. PayPal Pay in 3 doesn’t charge any interest on the total amount.
  • Automatic payments. The second and third instalments will be automatically taken each month from your bank account by PayPal Pay in 3.
  • Easy split. PayPal Pay in 3’s simple payment plan splits the total into three equal instalments.
  • Payment reminders. You’ll be sent an email or SMS reminder to let you know when your next payment is coming up.
  • Buyer Protection. You’ll be covered by PayPal Buyer Protection on eligible PayPal Pay in 3 purchases.
  • Multiple currencies. You can pay in all currencies that PayPal supports, not just GBP.

How much does PayPal Pay in 3 cost?

There are no fees for choosing to pay with PayPal’s buy now, pay later scheme. If you’re late with a payment, PayPal won’t charge any late payment fees.

  • Warning: Late repayments can cause you serious money problems. For help, contact the government’s free money advice website, Money Helper.

How do I sign up to buy now, pay later with PayPal?

First and foremost, your shopping cart will need to be between £30 and £2,000, and you’ll need a PayPal account to check out with.

Once you’ve logged in to PayPal, if PayPal Pay in 3 is available as a payment method, you’ll need to give your name, phone number, address, date of birth and your debit card information. You should know instantly whether you’re approved for financing.

How do I pay with PayPal pay in 3?

Once you are at the checkout page of your chosen retailer, select PayPal as your payment method. After you sign in to your PayPal account, if the “Pay in 3” option is available for your order you will see the option to select this service.

How does PayPal Pay in 3 assess applications?

It assesses your financial position using a combination of the information in your application and information about your PayPal usage and history. If it needs more information, it may also run a credit check.

  • Can PayPal Pay in 3 affect my credit score?

    PayPal says that, as a responsible lender, it will report a customer’s payments and missed payments to credit reference agencies when necessary. However, the UK’s main credit reference agencies are currently unable to consume BNPL providers’ data. This means that Pay in 3 currently does not impact your credit score but it could i the future.

  • What if I’m declined?

    If you’re declined for PayPal Pay in 3, you can still use PayPal to check out with your debit or credit card. And if you want to re-apply, you’ll be able to do so 35 days after your last application.

Where can I shop with PayPal Pay in 3?

PayPal’s buy now, pay later scheme is available to use at most stores where PayPal is accepted.

You can also pay in any currency that PayPal supports, not just pound sterling. In these cases, PayPal will automatically convert the transaction amount to GBP at checkout before giving the PayPal Pay in 3 plan. You’re likely to also be charged a currency conversion fee.

You can browse our full list of stores that accept PayPal or else check out the latest deals from some of these stores, below.

Customer reviews

PayPal Credit scores poorly on Trustpilot, with a rating of 1.3 out of 5 based on over 27,000 reviews. This is considered a “bad” rating overall (updated December 2023).

Our verdict

If you’re looking to spread the cost of your purchases with a well-known company, PayPal Pay in 3 might be worth taking a look at. But as with any buy now, pay later service, be careful not to spend more than you can handle to avoid potential financial issues.

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