You are here: Home - Credit Cards & Loans - News -

Klarna launches ‘pay now’ function

Written by:
Buy now, pay later lender Klarna is introducing a ‘pay now’ feature ahead of an expected regulatory crackdown.

The firm said UK consumers will be able to pay immediately and in full to give customers “more choice, clarity and control over how they pay”.

Klarna said it would also be strengthening affordability checks and making checkout language clearer, so customers understand that they are taking out a credit product, with consequences for missed payments.

Sebastian Siemiatkowski, chief executive of Klarna, said: “We firmly believe that most of the time, people should pay with the money they have, but there are certain times where credit makes sense.

“In those cases, our BNPL products offer a sustainable and no cost healthy form of credit – and a much needed alternative to high cost credit cards. The changes we are announcing today mean that consumers are fully in control of their payments whether they pay now or pay later.”

Buy now, pay later lenders such as Klarna give shoppers the option of delaying or splitting payments with no fees or interest.

Critics say such schemes encourage people to spend more than they can afford, with Citizens Advice saying they can be a “slippery slope into debt”.

Last month, Citizens Advice found one in 10 buy now, pay later shoppers have been chased by debt collectors, rising to one in eight young people.

The government announced plans earlier this year for buy now, pay later products to be regulated by the Financial Conduct Authority.

Myron Jobson, personal finance campaigner at Interactive Investor, said: “BNPL services have become like a drug for many consumers, particularly young adults, used to buy coveted clothing and must-have gadgets owned by their idols without having the cash in the bank to fund these purchases in full.

“The very existence of this form of lending flies in the face of the age old yet still important and relevant financial lesson of spending within your means – a lesson worth remembering amid the rising cost of living, compounded by bumper energy bills.

“The BNPL market is now too big to overlook, with the use of such products having nearly quadrupled in 2020 to reach £2.7bn, according to the City watchdog. Regulation can’t come soon enough.”


There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

It’s time to get your finances in shape, and moving your cash savings to a higher paying deal is a good plac...

Everything you need to know about being furloughed

Few people had heard of ‘furlough’ before March 2020, but the coronavirus pandemic thrust the idea of bein...

The experts’ guide to sorting out your personal finances in 2021

From opting to ‘low spend’ months to imposing your own ‘cooling-off period’, industry experts reveal t...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week