NatWest to enter buy now, pay later market
The bank’s proposition will allow customers to split purchases into several repayments almost anywhere that accepts Mastercard.
NatWest claims to be the “first high street bank” to enter the buy now, pay later (BNPL) market. However, Barclays offers Instalments by Barclays in conjunction with Amazon.
NatWest said its new product is aimed at helping customers “in the moments when it matters”, by automatically splitting purchases into several repayments, and providing customers with “a smarter way to spread the cost”.
The bank is planning on launching the new product in summer 2022 and said it will put safeguards in place to help ensure lending is affordable. It said transactions will also be covered “by all the protections customers expect from a fully regulated bank”.
David Lindberg, CEO of retail banking at NatWest, said: “There’s a clear demand for buy now, pay later and we are determined to make it better and safer. We have listened to our customers and are excited to provide them with a proposition that gives them greater flexibility to manage their finances.
“Customers told us they value fraud protection on purchases and useful tools and reminders to help them budget. They also like the convenience of managing buy now, pay later purchases alongside their other NatWest accounts in our award-winning app.”
NatWest said the new proposition will offer clear structured repayments, credit scoring and affordability checks. Customers will be given a fixed credit limit so they can “plan their purchases with confidence”.
The BNPL product will be integrated into NatWest’s mobile app, with customers able to monitor repayments, view their outstanding balance and receive notifications to help keep on track with payments.
Kelly Devine, division president for Mastercard UK and Ireland, said: “Offering people choice in how they pay is at the heart of what we do, so we are working closely with NatWest Group to give customers greater flexibility and control in how they pay and where they shop.
“Buy now, pay later has become a popular means to spread the cost of a purchase and with NatWest we are co-creating a solution which benefits from Mastercard’s reach as well as our trusted relationships with consumers.”
According to Open Money, use of BNPL schemes jumped from 49% in 2020 to 57% in 2021, a rise it described as “alarming”. There have been repeated calls for more protection for BNPL borrowers, with critics suggesting people don’t always understand this risks of this type of product.