Buy now pay later (BNPL) fintech firm Klarna has unveiled a raft of changes to its scheme following criticism from campaigners warning that its scheme can encourage its users to rack up debts.
Klara revealed it is strengthening affordability checks, simplifying checkout language, providing more ways of fair redress for consumers and removing the last remaining late fees on its regulated financing product, all with immediate effect.
From today, Brits will also be able to pay in full via Klarna, with the same payment experience as if they were to choose to pay later.
The move comes as research from Citizens Advice revealed One in 10 BNPL shoppers have been chased by debt collectors, rising to one in eight young people.
The charity’s latest research shows Buy Now Pay Later (BNPL) shoppers were charged £39 million in late fees in the past year.
Yet, the research also found that out of those offering BNPL, only 11 per cent warned shoppers they were taking out a credit agreement, the remaining 89 per cent put this information in the small print or T&Cs.
“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,” Klarna co-founder and chief executive officer Sebastian Siemiatkowski said.
“The changes we are announcing today mean that consumers are fully in control of their payments whether they pay now or pay later.”