Klarna is synonymous with the “buy now, pay later” trend, and tends to buy until the end of the month, deferring payments or paying interest-free monthly installments.
Nicholas Cocofris | nuphoto | Getty Images
On Monday, the UK government laid out a proposal to file a short-term loan under official rules as it aims to crack down on the now-buying “Wild West.”
Fintech companies such as Klarna block Afterpay flourished by providing useless funding for everything from fashion and gadgets to food delivery, but at the same time, it is concerned about affordability. This space is very competitive and our players are competitive positive It was released in the UK last year.
The city’s minister of Emma Reynolds said in a statement Monday that the UK’s new rules are designed to address the “wild West” feeling of shopping now.
Based on the UK proposal, BNPL companies will need to create prepayment checks to ensure that people pay back what they borrow and make it easier for customers to access refunds.
Consumers can also receive BNPL complaints to the Financial Ombudsman, a service created by the UK Parliament to resolve disputes between consumers and financial services companies.
The regulations are expected to come into effect next year, according to the government.
Klarna said she has long supported the call to bring BNPL into the folding of regulations. “It’s good to see regulatory progress and we look forward to working with the FCA to protect consumers and encourage innovation,” a company spokesman told CNBC in an email.
“Regulations will give the sector clarity and consistency and establish consistent operational environments and compliance standards for all providers,” a spokesman for ClearPay, the UK division of Afterpay, said in an email.
“It also continues to grow as a daily payment option for consumers, creating a more sustainable foundation for BNPL’s future.”
While buying now, companies after payment have publicly expressed support for the regulations, many worried that regulators would apply old rules to their business models. Consumer credit laws, which regulate lending and borrowing in the UK, have been around for over 50 years.
The government said it plans to adapt the consumer credit law to allow “a modern, pro-fund framework that reflects the way people borrow today.”
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