Retailers must protect shoppers from BNPL debt, says Barclays

BNPL
Fears are growing that BNPL usage could soar during the cost-of-living crisis
// Barclays says as many as 876,000 Brits could be prevented from falling into debt this year if  retailers demanded more responsible behaviours from lending partners
// Brits who use BNPL products are currently paying off an average of 4.8 purchases, up from 2.6 in February 2022

Barclays has called on retailers to step up and protect shoppers, warning that almost 900,000 Brits could be plunged into unmanageable debt this year without intervention due to the rise of buy-now-pay-later (BNPL).

New research from the bank’s partner finance arm  and debt charity Step Change showed that shoppers were turning to BNPL products amidst a cost of living crunch, with 36% of shoppers saying that BNPL products had become more appealing since inflation and energy costs began to climb.

The research revealed that as many as 876,000 Brits could be prevented from falling into debt this year if retailers demanded more responsible behaviours from their lending partners, such as performing full credit checks and reporting lending to credit reference agencies, or they switched to partnering with regulated finance providers.


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Brits who use BNPL products are currently paying off an average of 4.8 purchases, up from 2.6 in February 2022, suggesting an increasing reliance on this increasingly popular form of credit.

This is also backed up by retailers – those that offer BNPL credit estimate that the lending will account for nearly a quarter (22%) of sales by the end of 2022, rising from 18.7% today.

In addition, 86% say they have experienced a surge in demand for BNPL purchases since the start of the year.

CEO of Barclays Partner Finance Antony Stephen said: “Retailers are a vital gatekeeper in the lending process and it is crucial that they perform due diligence on the BNPL products they offer. However tempting it may be to evaluate BNPL payments purely on their acceptance rates or merchant fees, they need to go further and look at how responsible the lending process is behind each transaction.

“Our research shows that the ambition is there: around nine in 10 retailers support Barclays’ view that all credit providers should be subject to the same checks and balances. Businesses such as Amazon and Apple, who have already chosen to partner with regulated providers like Barclays, deserve credit for prioritising good customer outcomes over short-term profits.”

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