Pay Now is launched alongside a package of consumer-focussed changes to drive up standards across the UK consumer payments industry
Klarna, the leading global retail bank, payments and shopping service, today announces a package of changes to expand and strengthen its UK offering to give consumers more choice, clarity and control over how they pay. ‘Pay Now’ ensures UK consumers can always pay immediately and in full, wherever Klarna is available, with the same payment experience whether they choose to pay now or later. And in its continued drive to set standards for the UK payments industry, Klarna is also 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 – all with immediate effect.
Putting consumers in control whether they pay now or pay later
While it is best known for Buy Now Pay Later (BNPL) in the UK, globally Klarna offers a wide range of payment and shopping services and its ‘Pay Now’ immediate payment option is extremely popular globally. Klarna’s UK payment and shopping options will now be consistent with those offered globally across 20 markets, giving consumers more choice, clarity and control over how they pay.
Pay Now is launched alongside a package of consumer-focussed changes to drive up standards across the UK consumer payments industry. Central to this, Klarna has begun to leverage its own well established Open Banking services, already connected to over 6,000 banks across 20 countries, to help support even better real-time lending decisions. In addition to the robust checks which Klarna performs on each and every purchase, consumers will be able to securely share income and spending data from their bank accounts to confirm they can afford future repayments. This supports Klarna’s commitment to financial inclusion by giving safe access to credit for those individuals with a limited conventional credit history, which is reliant on the use of traditional credit and does not reflect how people are choosing to make payments today. Klarna continues to drive innovation and change with the UK Credit Reference Agencies to enable all buy now pay later providers to share their data. When completed this work will reward the vast majority of Klarna customers who use BNPL responsibly with improved credit scores, and further protect consumers from accumulating debt.
As part of continuous efforts to lead the way on transparency and protection for consumers throughout their shopping and payment experience, Klarna has recently further strengthened the language visible at checkout to make it absolutely clear that BNPL options are credit products, with consequences for missed payments. It has also worked together with the consumer group, Fairer Finance, to make sure that terms & conditions are clear, simple and easy to understand. Additionally, Klarna has established its own complaints adjudicator for consumers who remain dissatisfied with how their complaint against Klarna has been handled. Klarna took this measure after being informed by the Financial Ombudsman Service (FOS) that complaints about BNPL products currently could not be referred to FOS on a voluntary jurisdiction basis. Up and running for over 6 months now, this service is providing valuable recourse for consumers on the rare occasions when they are not happy with the way a complaint has been handled.
Finally, Klarna has never charged late fees on its Pay in 30 or Pay in 3 BNPL products in the UK. From today, the company will now remove any remaining late fees from its regulated Financing product, which consumers use to spread the cost of higher value purchases over 6 – 36 months. This change drives better outcomes for consumers and means that, whatever Klarna product they choose to use, they can be confident they will not be charged late fees.
Sebastian Siemiatkowski, Klarna’s Co-founder and CEO said: “We firmly believe that most of the time, people should pay with the money they have, but there are certain times where credit makes sense. In those cases, our BNPL products offer a sustainable and no cost healthy form of credit – and a much needed alternative to high cost credit cards. The changes we are announcing today mean that consumers are fully in control of their payments whether they pay now or pay later.”
Source: Company Press Release