US payments giant PayPal will make its new “pay in four” instalment option available to its 9 million Australian customers in early June, as the biggest competitive threat to Afterpay and Zip materialises amid a savage share rout in the buy now, pay later sector.

Afterpay shares lost another 4 per cent on Tuesday to close at $106.78 after falling off a cliff in mid-February. They are now down a whopping 32 per cent from their February peak, amid a savage turnaround in sentiment as tech valuations are smashed by rising bond yields and more intense competition emerges.