UK leader Klarna has been fired back at British multinational Barclays, calling the bank buy now, pay later (BNPL) report “Mind-boggling” and “irresponsible”.
Barclays recently published a report on the BNPL industry, in which it warned of the dangerous amount of debt that consumers can face if they rely on the service.
The report from Barclays and the debt charity StepChange found that 36% of consumers found BNPL products more attractive amid the cost-of-living crisis caused by rising inflation and rising energy bills.
That potential bump in BNPL customers could therefore put them at risk in a third of UK BNPL users who say they can’t handle their “unmanageable” payments, according to the report.
Klarna RA boss Alex Marsh responded to the warning from Barclays, telling RATN Barclays’ credit products are as difficult, if not harder, to manage for those who feel the financial pressure of the crisis.
“It is truly deceptive and irresponsible in a cost-of-living crisis that Barclays should use StepChange to endorse their high-cost installment credit product which charges 10.9% interest,” said Marsh.
“And to lobby against interest-free and manageable purchases now, pay for later products, which HM Treasury this week determined are lower risk than interest-bearing credit products.”
Marsh said Barclays’ conclusions are “extremely patronizing for UK retailers who already choose their credit providers based on responsible lending practices and quality of service.”
The leader of Klarna UK also said his company was “4.4 stars out of 5” on Trustpilot, “compared to Barclays breaking only 1.5 stars out of 5, it’s no surprise that UK retailers, like their customers, are ditching old banks” .
The war of words between the fintech bank and the high street bank comes as the BNPL sector comes under increasing scrutiny.
With millions of Britons using the service to buy products in installments, financial regulators are looking at the potential risks to consumers.
While the financial risks associated with traditional lending are generally known, the banking industry is much more tightly regulated than the BNPL space.
That is starting to change after the government unveiled its proposal new BNPL regulation earlier this week, which included mandatory consumer credit checks and registration with the Financial Conduct Authority (FCA).
Klarna welcomed the move, which implored the UK government “move faster”On the implementation of the proposals.
Klarna claims BNPL Barclays report ‘irresponsible’
Source link Klarna claims BNPL Barclays report ‘irresponsible’