Amazon is making a bigger push into credit. The e-commerce giant is testing a new feature, called Amazon Pay Monthly, that lets customers who buy big ticket items pay for them on an installment plan.
For now, the service is available only in the U.K. At checkout, shoppers there see an option to apply for the loan, which can be paid back over two to four years depending on the size of the purchase.
Amazon, through a partnership with financial services company Hitachi Capital, charges a 16.9% fixed interest rate. Customers are not required to put down a deposit.
When applying, customers go through a routine credit check that can be completed within a minute. This is the first time Amazon
has offered loans for a wide assortment of its merchandise.
Previously, the company let U.S. customers make monthly payments on some of its hardware devices including Kindle e-readers and Fire tablets. Amazon also offers credit cards that let the holders make payments over time.
But Amazon Monthly Payments allows U.K. customers to take a loan out to buy a single item, such as a TV. Products must cost at least $588 to qualify for the plan.
Amazon issued this statement to Fortune about Amazon Pay Monthly:
“The new Amazon Pay Monthly programme provides our customers with further payment options to suit their needs when shopping on our website, and it is easy, convenient and offers competitive rates and flexible terms.”
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For some other companies, offering credit at checkout has helped to boost sales. PayPal’s
rival service, PayPal Credit, is now one of the payments giant’s fastest growing businesses. PayPal said recently that shoppers who use its credit service typically spend 25% above the average order. Shopping marketplace Shop.com has seen 20% increase in size of orders from shoppers using PayPal Credit.
This isn’t Amazon’s first foray into alternative lending. Since 2012, the company has offered small loans to merchants selling on its marketplace, and recently expanded its lending program more broadly including to the U.K., India, Germany, and Spain.