Fast becoming a staple of ecommerce, finance brands offering consumers the chance to 'buy now, pay later' (BNPL) are not without their controversy.
In some quarters such brands are talked up as the potential saviour of UK retail. A recent Thisismoney.co.uk survey found nearly one in five consumers say that they wouldn’t shop with a retailer who didn’t offer some sort of BNPL scheme. However, in other circles these companies are decried as little more than payday loans with good PR.
The concept of BNPL taps into our lockdown-prompted need for instant gratification and speaks to a general distrust of credit cards, and even banks themselves, among younger consumers. For them, BNPL offers flexibility without (on paper least) landing them with a huge debt. Most providers focus on smaller sums than credit card companies, with usual purchases being fashion retail or electronics.
One of the best know of the current crop of BNPL providers is Klarna, a Swedish company that first surfaced in the UK in 2016. Klarna’s UK head of consumer marketing, AJ Coyne, explains the company has a wide consumer base and the average age of its UK users is 33. In fact, the Generation X demographic constitutes its biggest sector in terms of growth and transaction values.