NatWest to Launch “Buy Now, Pay Later” Credit Program This Summer | NatWest Group


NatWest will join the booming but controversial ‘buy now, pay later’ market this summer, becoming the first UK bank to announce its entry into the multi-billion pound sector.

The bank is still majority taxpayer-owned – albeit fair, as government ownership is now about 51% – after a state bailout during the financial crisis. Its more than 18 million customers might be surprised to learn it’s offering this unregulated form of credit, which allows people to put off paying for items ranging from clothes to pet food. .

However, NatWest said there was “a clear demand” for buy now, pay later (BNPL), and was determined “to make it better and safer”.

BNPL allows buyers to stagger payments for goods without interest or charges – unless they fail to repay on time, in which case some companies charge late fees. Generally, the cost is divided into weekly, bi-weekly or monthly installments.

The three main BNPL companies are Klarna, Clearpay and Laybuy, and this form of credit has seen explosive growth during the coronavirus pandemic, especially among those under 30 and those with tight finances.

NatWest is not the first British bank to enter this sector: the exclusively online bank Monzo launched a BNPL product in September 2021. A year earlier, PayPal entered the market with its “Pay in 3 “. However, NatWest is the biggest UK household name to start offering this payment method and it has a huge following to market it.

NatWest has announced plans to launch its BNPL product this summer. The bank has not yet specified how it will work, although it has said that, as with other plans, it will split purchases into multiple repayments. It would also give customers the option to make a purchase almost anywhere Mastercard is accepted, meaning it will be available for purchases both online and in person.

Like Monzo, NatWest will offer customers a credit limit they know in advance, and those who take advantage of the service will be able to manage it within the bank’s app.

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A NatWest spokesperson said the transactions would be covered “by all the protections customers expect from a fully regulated bank.”

Many consumer groups and politicians have expressed concern over BNPL’s rapid rise, with Which? magazine saying in January that stronger safeguards were needed to protect users because many people did not realize they were getting into debt.

In response to these concerns, the government announced that the BNPL is to be regulated by the Financial Conduct Authority, although the rules are not expected to come into force until the end of this year or in 2023.

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