PayPal will let users split the cost of purchases over up to 24 months

PayPal is expanding its buy now, pay later options with a longer-term payment plan. The company has enabled users to cover the cost of a purchase over a few interest-free payments and it also offers credit cards. Pay Monthly, which is issued by WebBank, is another option for folks in the US.

It's valid for purchases between $199 and $10,000. The cost will be split across monthly payments of between six and 24 months. If you select the Pay Monthly option at checkout, you'll then need to complete an application. Should that be approved, you'll be able to select from three payment options with different time frames. APR is calculated on a risk basis and will be between zero and 29.99 percent. The first payment is due a month after purchase.

You can set up automatic payments from your debit card or bank account. Alternatively, users can manage payments through PayPal's app and website. As with the company's other buy now, pay later options, there are no late fees. PayPal says millions of retailers will support Pay Monthly — including Samsonite, Fossil and Advance Auto — and that purchases will be eligible for PayPal Purchase Protection.

With its latest option, PayPal is getting out ahead of Apple Pay Later, which will be rolled out as part of iOS 16 later this year. That's aligned more with PayPal's Pay in 4 option, in that users will make four equal payments over six weeks, with no interest or late fees. However, purchases are said to be capped at $1,000.

Such moves by the likes of PayPal, Apple and Square are indicative of a broader trend of major tech companies moving deeper into lending, a finance sector that was primarily the domain of banks. However, there are risks to using now, pay later services, especially if consumers fall behind on payments.