PayPal has announced a new service in Germany that enables shoppers to pay for goods in stores using their contactless mobile wallet.

Users will be able to access the new feature through the latest version of the PayPal app.

PayPal said that consumers will be able to tap their phone at any location that accepts Mastercard contactless payments.

Additionally, PayPal will roll out an option for customers to pay in instalments in physical stores in Germany in what the company said is a first for Europe.

The Buy Now, Pay Later (BNPL) service, called ‘Ratenzahlung To Go’, will enable customers to pay in three, six,12 and 24 month instalments through the PayPal app and spread the cost of larger in-store purchases directly with the company.

Through the app, customers can also activate offers to earn cashback.

Once activated, PayPal said customers will earn these rewards when they pay using contactless with the PayPal app at a range of German stores.

PayPal said the new features form part of biggest ever investment in product development for customers in Germany.

Joerg Kablitz, managing director, PayPal Germany, Austria & Switzerland, said that as technology advances, the benefits of digital payments in stores are becoming harder to ignore and while cash has a role to play, many consumers and businesses are ready for alternatives.

“Put simply, we believe PayPal is better than cash,” he added. “Our App will make it easy and safe to pay with your phone in stores; it will give you more choice in how and when you pay; and even better – PayPal will help put money back in your pocket.”

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