Till now, BNPL (‘buy now pay later’) methods of payment have been offered across many leading retailers, garnering popularity within the beauty and fashion industry. Some of the biggest players in this space – like Klarna and Zilch – have ventured slightly further from this in the recent weeks, as they begin to promote their services for groceries, fast food and hot drinks.
More specifically, tech finance firm ‘Zilch’ has announced a partnership deal with superstore ‘Iceland’, encouraging retailers to consider purchasing their weekly shop (including ready meals, pet food and fizzy drinks) on credit. Lenders offer credit on an interest-free basis, over a maximum period of six weeks and the first payment is just 25% of the shelf price.This includes a six week time frame to pay for Domino’s Pizza and Uber Eats.
The Treasury is to publish proposals later this year on regulating the sector, which is not covered by consumer credit laws, as no interest is charged on the debt. However, some BNPL operators do charge transaction fees and penalties for late payments.
The Financial Conduct Authority commented:
“Buy now, pay later products need to come into regulation. It is vital the law, which sets our remit, adapts as the market innovates, so new products and services develop in a way that benefits consumers and that action can be taken to prevent harm.”