Klarna Adds ‘Pay Now’ Option in U.K. Amid Regulatory Scrutiny
Klarna is adding an option for British consumers to pay immediately at checkout as the “buy now, pay later” giant looks to ease regulatory concerns about the sector.
The “pay now” feature comes amid increased scrutiny from U.K. regulators, who are concerned about money-laundering and the cost of credit. The U.K.’s Financial Conduct Authority said earlier this year it will start regulating the interest-free BNPL sector as their use soars.
Other changes include “strengthening affordability checks and checkout language, providing more ways for consumers to challenge complaints decisions on the rare occasions this becomes necessary, and removing the last remaining late fees on its regulated financing product,” the Swedish company said in a statement Monday.
Fintech firms such as Klarna and Afterpay Ltd. have grown into multibillion-dollar companies by offering online shoppers the option to pay in installments. Buy-now, pay-later specialists have already diverted as much as $10 billion in annual revenue from banks, according to research in July by McKinsey, and traditional financial giants including Goldman Sachs Group Inc. and Mastercard Inc. are trying to muscle in on the market.
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