Interactive Investor

Klarna 'buy now, pay later' firm launches card in UK

26th January 2022 13:35

Jemma Jackson from interactive investor

interactive investor comments on the launch of physical card.

  • Buy now pay later (BNPL) firm Klarna has announced the launch of its first physical card in the UK
  • The card launches with Klarna’s Pay in 30, which allows consumers to pay anytime up to 30 days after purchase.
  • The company said it plans to add additional payment options in the future.

Commenting, Myron Jobson, Personal Finance Campaigner, interactive investor, says: “It looks like a credit card, but crucially it isn’t - blurring the line between regulated and unregulated credit. Klarna and other BNPL providers are not required to abide by the same regulations as more traditional creditors, requiring things like affordability checks and making sure customers are treated fairly.

“Regulation of the BNPL industry can’t come soon enough as the increase in the cost-of-living risks even more people turning to BNPL schemes to help tide them over. You can now buy essential groceries through some BNPL services.

“Worryingly, many people are still unaware that BNPL schemes are a form of credit. Recent research by Which? found most users admitted to skim reading the T&Cs or simply ticked a box to say they had read them. BNPL firms should make it crystal clear to customers that they could be referred to debt collectors and their credit scores could be tarnished if they miss payments.

“Consumers would do well to remember the age old yet still important and relevant financial lesson of spending within your means as. While it might be tempting to delay payment – and BNPL adverts can be very enticing and sometimes misleading - it can be a slippery slope into debt.”

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