The way that traditional cell phone contract have worked in the past in the United States and the way that they continue to work with certain carriers in Canada is that the subsidy or discount associated with getting a new device is tied into the cost of the monthly plan as part of a 2-year or 3-year service agreement. When you pay $60 a month for your cell phone service, perhaps $20 of that is allocated to financing the cost of your phone, even if this amount is not explicitly stated.
That has changed significantly in the American market in recent years, making it clearer when customers are actually financing a phone and how much is being paid toward the cost of the phone each month. For example, a Samsung Galaxy S7 edge is currently available through AT&T for $26.50 per month, so long as you agree to a 30-month installment plan and qualify for the 0% APR financing. There is no interest being paid, as the full cost of the phone is still $794.99; paying $26.50 each month for 30 months yields a total payment of $795.00.
This notion of installment plans for cell phones is still largely tied into the wireless carrier, at least in the American market. If you want to buy an unlocked phone, like a Huawei-made Nexus 6P directly from Google, you typically have to pay the full purchase price up front. One company that has gone against tradition in the past and once again blazing a new trail. OnePlus has announced that it has started offering financing options for any order over $99.
That means that you no longer have to pay the full price for a OnePlus X or OnePlus 2 up front, as you can split the full cost of the phone over several months instead. Instead of handling the financing itself, OnePlus is utilizing PayPal Credit, which can be selected as a payment option during checkout. The fundamental principle remains the same.
A new OnePlus 2 can then be purchased for $22.60 a month over the course of 18 months or a OnePlus X can be bought for $16.12 a month for 18 months. However, unlike the carrier installment plans where zero interest is charged, buying a OnePlus phone with PayPal Credit over a period longer than six months results in PayPal’s 19.99% APR. Pay off your amount in full within six months and there is no interest on your purchase.
Will Google offer PayPal Credit as an option for buying Nexus smartphones in the future? What about unlocked phones directly from manufacturers like Motorola? It could be an emerging trend.