Revolut latest FinTech to join BNPL market

Revolut has revealed plans to offer Buy Now, Pay Later (BNPL) services to its 16 million customers.

The financial technology business, which is currently worth $33 billion, is the latest in a long list of companies joining the fast-growing market.

Today, payments giant PayPal announced its plans to acquire BNPL venture Paidy in a $2.7 billion deal.

Laybuy, the New Zealand company with a growing UK presence, launched its flexible payments app last week.

The company is developing a checkout feature and the ability to enable customers to split the cost of any purchases using its cards, according to a report by the Evening Standard.

“Simply a button which you switch on and then your card becomes a buy now pay later product,” Nikolay Storonsky, Revolut chief executive, told the paper. “Instead of paying upfront everything, you pay a third and then in two weeks time we charge you a third and then another third.”

The report said that the BNPL products are in the early stages of development and are expected to be tested in some European markets in 2022.

Last year saw the UK’s BNPL market almost quadruple, driving its value up to £2.7 billion.

The growth of the market has proven controversial, with recent research from Citizens Advice revealing that one in eight – or 12 per cent – of consumers between 18 and 34 have been chased by debt collectors after using BNPL services.

BNPL firms Klarna, Clearpay, Laybuy, and Openpay told Citizens Advice they only refer customers to debt collectors as a last resort.

Earlier this year, following the publication of the UK financial watchdog’s Woolard Review, the government decided that it would take action to regulate BNPL providers.

It was revealed that the Financial Conduct Authority would work with the Treasury on amendments to existing legislation and to develop a “proportionate regulatory framework.”

Revolut said that the service would launch in EEA markets where the company has a bank licence before the UK.

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