The traditional banking sector and the buy now, pay later industry tussle once again, as the UK government looks to set out additional rules. Business Development Director comments on this increasingly popular debate.
Tensions are spilled over as mainstream banks warn the public they could fall into financial difficulty as a result of using BNPL, but is their research and findings a ploy – simply distributed to deter Brits from going elsewhere?
The BNPL industry hit back to claim it irresponsible that banks lobby against interest-free and manageable buy now, pay later products. With Apple recently announcing they too are getting in on the mix with their new iOS Wallet feature ‘Pay Later’, we can possibly see a new trend emerging for how we handle our finances.
Last week, the UK government outlined long-awaited plans to make BNPL providers carry out affordability checks and refrain from misleading advertising and promotions, and will publish a consultation on draft legislation toward the end of this year.
The long timeline has led to criticism by consumer champions who fear that millions of people in the UK have been saddled with unaffordable debt by taking advantage of easy-to-access BNPL lending. As these additional rules only strengthen the industry and address this criticism, the real challenge now for growing BNPL firms to continue their intended trajectory is ensuring efficient affordability screening does not affect the customer interaction.
Get in touch to see how we are helping organisations achieve efficient affordability screening and streamlined customer onboarding.