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November 28, 2022
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British fintech Revolut enters crowded BNPL market

Revolut has announced it is entering into the buy now, pay later (BNPL) space with the rollout of what it calls a “responsible” pay later product.

The British fintech will let customers spread the cost of purchases up to €499 across three instalments, with a fee of 1.65% per purchase being repaid in the first two.

The rollout will initially take place in Ireland from this week. The company will look to offer the service in additional markets later this year.

Merchants will not have to sign up to be eligible for the service and will not be charged for customers using it to purchase their products.

This is a different model from the likes of rival BNPL firms Afterpay and Zilch, which offer interest-free repayments and instead charge merchants.

BNPL products have come under heightened scrutiny recently due to fears of customers getting themselves into additional debt, a particular area of concern given the current cost-of-living crisis.

UK bank Barclays recently published a report showing the risks facing customers who use BNPL services. The report was later criticised by the largest provider of BNPL products in the UK, Stockholm-headquartered Klarna.

The BNPL industry as of now is largely unregulated. However, that is set to change as the government prepares to enforce the new regulatory requirements it proposed this week.

The Revolut BNPL service will come pre-packaged with certain safeguard features that are likely to become a requirement for the rest of the industry.

These include checks to make sure customers can afford the payments before a purchase is made. Uniquely, Revolut’s pay later system assigns customers a “bespoke” credit limit before any purchasing can be done, with the highest limit being €499.

“Pay Later is an exciting and fast-growing area of personal finance and consumer spending, and we are excited to add Revolut ‘Pay Later’ to our financial superapp,” said Joe Heneghan, CEO of Revolut Europe.

“Revolut Pay Later gives our customers more control and flexibility over their personal finances, in a responsible way, by enabling them to spread the cost of purchases over three instalments.”

The post British fintech Revolut enters crowded BNPL market appeared first on UKTN | UK Tech News.

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