U.K.’s FCA Plans to Regulate Buy-Now Pay-Later Products
- Interest-free unsecured lending has soared since the pandemic
- Report also calls for continuing forbearance on consumer loans
Use of the interest-free buy-now pay-later sector nearly quadrupled in 2020 to reach 2.7 billion pounds, with providers like Klarna AB among Europe’s most valuable startups.
Photographer: Hollie Adams/BloombergThis article is for subscribers only.
The U.K. Financial Conduct Authority will start regulating the interest-free buy-now pay-later sector, bringing government oversight to a growing area of consumer credit.
This type of unsecured lending has boomed as online shopping soared, with 5 million people using such products since the beginning of the pandemic, according to an FCA statement Tuesday. Their use nearly quadrupled in 2020 to reach 2.7 billion pounds ($3.7 billion), with providers like Klarna AB among Europe’s most valuable startups.