Revolut introduces Pay Later instalments product to Ireland

Revolut has today announced the rollout of its ‘Pay Later’ product in Ireland and across Europe.

Its new payment product allows customers to 'buy now and pay later' for products that are purchased using its app or with one of its debit cards - and for a fairly reasonable fee too!

Pay Later is part of a "fast-growing area of personal finance and consumer spending" according to the CEO of Revolut’s European operations, Joe Heneghan, and one it is setting its sights on with the launch of this new service.

Here’s a look at how Pay Later from Revolut works, as well as everything Irish consumers need to know about its release.

Affordable finance

Pay Later is the new instalment payment product from global fintech Revolut which allows consumers to purchase products immediately without having to pay the full amount upfront.

Those making a purchase through the Revolut app can choose to spread the cost of a purchase across three instalments, up to a maximum of €499. Pay Later is the first product of its kind in Ireland that uses an approved credit limit.

Revolut charges a fee of 1.65% per purchase made using Pay Later, with the first instalment paid upfront by the customer at the time of purchase, followed by two monthly instalments over 60 days, with the fee spread out equally over the remaining instalments.

Here’s a representative example of what a purchase worth €120 might look like using Pay Later.

• You make a Pay Later purchase on May 1st for €120.
• Revolut’s Fee is 1.65% of the €120 purchase price, which equals €1.98. 
• You pay €40 upfront on May 1st and then two payments of €40.99 on June 1st and July 1st. 
• The total amount you have borrowed is €80 and you pay Revolut back €81.98. 
• This example gives an APR figure of 21.4%.

Speaking about the launch of the pay later service, Joe Heneghan, CEO of Revolut Europe, commented: 

Revolut Pay Later gives our customers more control and flexibility over their personal finances, in a responsible way, by enabling them to spread the cost of purchases over three instalments. This encourages people to pay within two months, rather than calling on overdrafts and credit cards which don't carry the same emphasis on quickly paying back the amount borrowed.

It’s also worth pointing out that the current maximum credit limit is €499, but each customer can have their own limit which will be decided by Revolut’s credit assessment (more on this shortly). A customer’s limit replenishes once the final instalment has been repaid.

Customers can’t withdraw money with Pay Later either, as the service may only be used for a purchase transaction.

So, who can get access and when?

Who is eligible for Pay Later in Ireland? 

Beginning this week, some Revolut customers in Ireland will be eligible for early access to Pay Later, which will then gradually roll out to all users in Ireland.

If you’re an eligible customer, you’ll be able to activate Pay Later from within your app in the Pay Later hub. Customers can also view their Pay Later balance in the Cards section.

Customer eligibility will initially be decided based on Open Banking data from customers’ linked bank accounts to establish whether a customer is able to afford Pay Later.

The application carries out checks on a customer’s financial circumstances and ability to repay, and considers any other activities which might flag concerns over the affordability of the service.

Depending on how popular Pay Later is with customers, Revolut plans to offer the service to customers in Poland and Romania later this year, with additional markets coming on stream from the end of 2022.

Why it could come in useful

Firstly, pay later services offer customers much more financial flexibility and Revolut’s new service puts a particular focus on ‘responsible credit and affordability’.

Pay Later allows you to repay what you owe over a period of two months, with a relatively low fee of 1.65% charged.

Other financial facilities such as credit cards and overdrafts offer similar alternatives, but are more focused on long-term lending and have higher rates, as opposed to paying later, which allows users to finance short-term spending with an emphasis on repayment sooner rather than later, and at no great cost.

Revolut also allows for early repayments, so if a customer would like to repay the instalments at any time, there are no additional fees to do so.

What’s more, customers can choose to use Pay Later for whatever they like (within their credit limit of course), as the service isn’t restricted to merchant partnerships. This means customers can pay with any of their Revolut cards, including with a Revolut disposable virtual card for online transactions.

There is a worry however that a service like this might reinforce a reliance on so-called ‘easy’ credit. That being said, each customer’s credit limit must be approved and assessed by Revolut beforehand.

As well as the above, certain restrictions apply to particular types of payments. For example, Pay Later cannot be used to make payments for things like Stocks or Crypto. Additionally, restrictions to certain merchants also apply, such as gambling.

Compare banking options on bonkers.ie

Here at bonkers.ie you can compare a range of different current account options in just a few clicks. You’ll easily be able to review fees and account features from Ireland’s main current account providers.

Before deciding on the current account for you though, discover which banks are currently offering the best value current accounts here.

We’d also recommend taking a look at our piece on which banks have the best mobile apps if a great mobile experience is a must for you. 

Let’s hear from you

Will you be using Revolut’s new Pay Later feature? We’d love to hear from you. 

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