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4 Buy Now Pay Later companies transforming the UK financial market

By Megha Bhattacharya

January 28, 2021

  • Klarna
  • PayPal
  • UK
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Buy Now Pay Later is revolutionising the way customers make purchases online and even in-store, by making payments more flexible and convenient for shoppers. Buy Now Pay Later FinTech companies have seen an increase in popularity over the past few years since they were introduced in the UK back in 2014.

Here are the top 4 Buy Now Pay Later FinTechs in the UK –

  1. Klarna

Klarna is a Swedish bank that provides online financial services such as payment solutions for online storefronts, direct payments, post-purchase payments, etc. Klarna is considered the most valuable FinTech in Sweden with capital standing at $1 billion. The country currently hosts around 48 startups with total funding amounting to $2 billion. It was founded in 2005 by Sebastian Siemiatkowski (CEO), Niklas Adalberth, Victor Jacobsson.

Recently, Klarna officially launched in Italy with the release of Pay in 3 solution. Italian customers will now be able to use Klarna’s new shopping solution with H&M, Michael Kors and with several other well-known merchants to follow in future.

It also launched its newly redesigned app in a bid to boost the shopping experience for its users across the UK. The new app is expected to cover the entire shopping journey of users with content personalised on the basis of users’ interests, preferred stores, and previous shopping behaviour.

  1. PayPal

PayPal Holdings is an American company operating an online payments system in the majority of countries that support online money transfers and serves as an electronic alternative to traditional paper methods like checks and money orders.

Recently, PayPal announced the launch of PayPal Pay in 3 in a bid to enable UK businesses of all sizes to offer buy now, pay later payments without taking on additional risk or additional fees. The new service will allow businesses to offer their customers the option of making purchases between £45 and £2,000 by paying over three, interest-free payments and automatic re-payments each month.

Starling Bank recently announced that it has added PayPal’s iZettle to its Business Marketplace. The new development will facilitate the provision of in-depth transaction information to business owners. The integration of iZettle will give SMEs information about sales, fees, tips and taxes.

  1. Laybuy

Established in 2017, Laybuy is a buy now, pay later service that partners with retail merchants globally. It is a ‘risk-free’ solution that takes responsibility for all the credit risk for the weekly payments. Laybuy Boost assist customers who want to purchase items beyond their credit limit by allowing them to pay the difference up-front and spread the rest of their payments as they normally would.

Recently, Laybuy announced a partnership with Manchester United with an aim to offer a new and interest-free payment option to help customers buy merchandise and show support for the club. Laybuy, via the collaboration, aims to make football more accessible to fans across the UK.

Laybuy is only currently available to merchants operating in Australia, New Zealand and the United Kingdom. Further expansion will be in the near future.

  1. Payl8r

Manchester-based Payl8r offers a convenient, and modern method of paying for goods and services online and in-store. It aims to provide its customers with an attractive and beneficial alternative to credit cards. Payl8r’s ease of use and range of financing options encourages customers to purchase more of the products they desire.

Payl8r’s lending is based on affordability rather than credit history, meaning they lend to an audience comprising credit, thin credit, previous bad credit, students, benefits. The company’s typical interest rates range around 2% per month.

ALSO, READ: Global FinTech Use Cases in Financial services by IBS Intelligence 

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