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Are there too many ‘Buy Now, Pay Later’ schemes at online checkouts?

Do you use Buy Now, Pay Later (BNPL) schemes when shopping online? Have you felt overwhelmed by the options at the checkout? We want to hear from you.

An increasing number of online retailers offer ‘Buy Now, Pay Later’ (BNPL) schemes at the checkout – we want to see firms like this regulated by the Financial Conduct Authority.

BNPL firms, such as Klarna, Laybuy and Clearpay, allow you to order your items and pay for them either in instalments or at a later date.

But we don’t believe it’s always clear at the checkout how the BNPL schemes work or the nuances between different providers. We’re looking into how these schemes are presented at online checkouts and on retailers’ websites, and want to hear about your experiences when using them.

Chaos at the checkout?

An influx of BNPL schemes at the online checkout means deciding how to pay for your order isn’t as straightforward as it used to be.

Some online retailers offer a number of different BNPL schemes that are often promoted from the minute you click onto the homepage and product listing pages all the way through to the checkout. We’re concerned that there’s often sparse detail on how each scheme differs in terms of late fees, credit checks and how repayments actually work in practice.

We want to hear from you if you’ve ever felt confused or overwhelmed at an online checkout that offers multiple BNPL options; did you understand the difference between the schemes? Were you confident you knew exactly what you were signing up to?

Could the retailer have done more to explain the nuances between different providers?

Or if you’ve over used a BNPL scheme and found yourself caught out by late fees or repayment dates that weren’t clearly explained by the retailer, let us know in the comments below.

Have you used multiple BNPL schemes?

We also want to hear from you if you’ve taken out more than one BNPL repayment plan at a time.

Perhaps you’ve shopped with a retailer that offers Klarna and Laybuy, and decided to place two separate orders taking out repayment plans with both providers? Or maybe you’ve used Klarna to pay for orders from a number of different retailers, racking up a handful of repayment plans.

Let us know if you’ve taken out multiple BNPL plans at one time and how you found the experience of managing the repayments.

Whether you’re put off by the influx of BNPL schemes at checkouts or use BNPL wherever you can online, get in touch with your experience in the comments below or email us at yourstory@which.co.uk

Your experiences will help inform our investigation.


I felt this yesterday, ordering something very simple through Very.co.uk became a minefield of the website trying to put a £10 towel on a buy now pay later scheme. It was so pushy I gave up in the end

I’ve had a similar experiences @chiragkhetiya using Wayfair.co.uk. For bigger purchase items like our garden seating, I can understand but for smaller purchases, it seemed madness offering a scheme for a total of £25! I can see why people end up struggling.

I support Which? in wanting to see companies offering BNPL regulated by the FCA.

Like credit cards, BNPL can help push people into debt and perhaps it is inappropriate for BNPL to be offered for luxury goods.

What is particularly poor is when I have already decided to make a purchase, I head for the checkout and I am then presented with the distraction of using a BNPL option to pay for goods. This can also happen with options to pay using PayPal and then setting up a separate credit agreement.

Almost without exception, I avoid these options, as I get cashback on my credit cards, or have a better, long-term 0% interest rate deal running. Paying for an item costing more that £100 loses the consumer the valuable protections of using a credit card, so I would never use BNPL in those circumstances.

I also prefer all my purchases to be shown on one statement and automatically covered a pay-in-full direct debit mandate.

BNPL needs to be banned as a checkout option. If entering into a purchase with the intention of using BNPL (presumably in the knowledge that you cannot afford to play in full), it must be only be offered to registered customers that have pre-selected the option and confirmed they have read all the terms and conditions, before reaching the checkout.

The notion of preventing someone buying “luxury goods” on BNPL seems a little odd. Surely it is anyone’s freedom to buy what they like (and take the consequences) and there are many ways they can pay, including a credit card. It would not be known whether someone is making a one off exceptional purchase, what their reason is, who the “goods” are for. And, in any case, exactly what is a “luxury”? To many, it may be anything other than life’s essentials.

However, I have an inherent aversion to providing easy loans that can help people into debt that they have not the ability to handle. Pay day loans were an extreme example. The problem with BNPL, apart from being unregulated, seems to be their use for low value purchases, encouraging a lot of such purchases when they are unnecessary and, for some, unaffordable. The same argument applies to credit cards, of course.

Protecting people from themselves is a perennial problem. Should we even attempt it, and by what authority, when we live in a free society? Education is one way, experience is another where people who get into difficulties must learn the consequences and find their own way out.

But ban them purchasing particular goods in any way open to them? Not for us to decide, I would suggest.

I did not suggest that anyone should be prevented from buying luxury goods, Malcolm, simply that BNPL should not be offered on these goods. I understand that BNPL is extensively used to purchase fashion clothing and accessories.

I do not understand why BNPL is not currently regulated by the FCA.

It seems that clothing retailers and on-line purchasing are the main promoters of BNPL, possibly because they are the chief outlets for impulse buying where it is easy to add a few extras to the shopping basket without noticing the escalating cost.

I can’t see the point of any limitations on ‘luxury’ goods; discriminating between them and other purchases would be a problem and since many of them are likely to be gifts it seems unnecessary to complicate things like that.

There needs to be help for people who get into financial difficulties from overuse of extended payment facilities but not at the expense of others who manage their money responsibly. People who apply for a credit card are assessed to establish a suitable credit limit and their accounts are to some extent supervised. I don’t know whether any similar process applies to using BNPL.

“Protecting people from themselves is a perennial problem. Should we even attempt it, and by what authority, when we live in a free society?” That’s an interesting question and where do you draw the line?

The FCA is there to protect us from unscrupulous financial services and ill-advised investments. By what authority?

Laws about food, medicine and product safety are designed to protect us from unscrupulous manufacturers out to make a quick buck by adulterating food, selling quack cures and making cheap products. By what authority?

The laws on fraud are supposed to protect us from con artists out to steal our money. By what authority?

Shouldn’t people in a free society be allowed to make a living in any way they see fit? And shouldn’t that include FCA, FSA, MHRA, Trading Standards, solicitors and police?

To answer wavechange’s question: “I do not understand why BNPL is not currently regulated by the FCA.”

There is an anomaly in The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, that was designed so that some types of commercial credit facility – e.g. 30 / 60 days settlement of invoices or monthly accounts – were not caught up the legislation to control consumer credit.

Provided the loan is for less that 12 months and no fees are charged, it is currently exempt. Until the law is tightened, the FCA have no authority to act on consumer credit arrangements that exploit this loophole. It is already recognised and in hand.

My comment was made in the context of making financial – in this case purchasing – decisions – in perfectly legal circumstances.

Legislation is used to help prevent us being exposed to danger, fraud, for example. However, it does not prevent us, say, importing a dangerous product, buying illicit or harmful substances on the internet, investing money with an unregulated outfit. It seems to me that only knowledge, information, common sense, experience can help is avoid that potential harmful activity.

Making ill-advised purchases that get us into unmanageable debt is surely something we have to try to learn to avoid. Is there any “authority” that can stop this? Some agency that watches over each of us and governs our spending?

What would you classify as “luxury goods”?

”Which? is calling for greater regulation to ensure BNPL firms are being transparent about the risks of using their services.

They also report ”In February this year, the government announced BNPL firms would be regulated.

Read more: https://www.which.co.uk/news/2021/06/buy-now-pay-later-not-just-used-by-fashion-conscious-young-shoppers/ – Which?

It would be useful if Which? had also explained why this method of payment is currently not regulated, just as Em has done.

Thanks for explaining why BNPL is not currently regulated, Em.

I didn’t have time earlier (and don’t really now, so E.&O.E.), but I think this is the relevant section, which I’ve redacted for clarity:

60F.—(1) A credit agreement is an exempt agreement for the purposes of this Chapter in the following cases.

(2) A credit agreement is an exempt agreement if—

(a) the agreement is a borrower-lender-supplier agreement for fixed-sum credit,

(b) the number of payments to be made by the borrower is not more than twelve,

(c) those payments are required to be made within a period of 12 months or less (beginning on the date of the agreement),

(d) the credit is—

(ii) provided without interest or other charges.

I usually use a credit card for on-line purchases and haven’t noticed or paid much attention to the occasional options to use Klarna [the only BNPL platform I have seen]. BNPL has no attraction to me over a credit card.

I certainly share the concerns about the convenience of BNPL facilities encouraging people to commit themselves to more than they can pay back and therefore get into debt. I therefore agree with Wavechange and support the call for regulation, including a monitoring process for people who might be over-extending themselves through a number of plans with one facilitator but, more importantly, those who spread themselves across a number of facilitators and lose control.

To some extent these risks have been with us since the days of hire purchase and catalogue shopping but the tendencies to run on credit are greater these days due to peer pressure expressed through social media. I have direct experience of a member of my family who allowed themselves to get into a financial pickle through prolific use of BNPL facilities. It was a distressing situation for the individual and their immediate family but, with a good bit of rallying round and pulling together it has been resolved, however it sure has left its mark.

For a more in depth understanding of the rise and rise of BNPL and some of the psychology used to promote this, you may find the following of interest:

psychologytoday.com – Beware of the “By Now, Pay Later” Psychological Pitfall.

Thank you, Beryl.

It’s interesting that BNPL appeals to — and to some extent is marketed towards — two particular groups who should not get themselves into financial difficulties and ought to be protected against that possibility : (a) People with no credit such as teens and young adults, and (b) People with poor credit

I liked this piece of advice at the end of the article — “Remember, your worth does not come from what you wear or the items you own. You are innately worthy and deserving of all that is good. You are worth saying no to BNPL offers that may negatively impact your emotional and financial wellbeing.

I am glad you picked up on the addendum John, which is probably the most revealing and important part of the article.

The fierce competition in the online marketplace is now heavily targeted at both groups, all of whom will be in possession of mobile phones, provided by parents in the interests of their young offsprings safety.

I was looking at a potential scam email offering Klarna payments, that eventually linked me onto the genuine Klarna website. I was surprised by what I found, which I think needs to be reported to the ASA and/or FCA when I find the time. Maybe Which? could oblige?

The webpage is headlined:

Klarna is the smooothest and safest way to get what you love today, and pay over time. No interest. No hidden fees. Just Klarna.

Further down the page, three different payment options are offered, each illustrated by a mobile phone app screen shot and a caption as follows:

Pay in 3
Spread the cost of your purchase into 3 interest-free instalments. The first payment is made at point of purchase, with remaining instalments scheduled automatically every 30 days.

Pay in 30 days
Make your purchase today so you can try before you buy. Only pay for what you keep. Pay up to 30 days later. No interest. No fees. No impact credit score.

This longer term credit option allows you to spread the cost of more expensive purchases over 6-36 months.

The last option – Financing – was illustrated with an app clearly showing 6 monthly payments with an interest rate of 0% APR. How does that work? Is that even better than the Pay in 3 option?

The link to the “Legal terms” shows that this is an FCA regulated product. It goes on to state:

3. Interest
For any Purchase made with the Account, “the Transaction Date” is the day when the goods are dispatched or, for a service, when the service is made available to you. Interest is charged, starting on the Transaction Date, on the balance outstanding on your Account for Purchases, with each Purchase being added to the balance on its Transaction Date. Interest is calculated on a daily basis and added to your Account each month on the date we produce your statement.

The standard interest rate is 0.047 % per day, which results in an effective annual rate of 18.9 %. (“Standard Rate”). It is charged daily on the balance outstanding of all Purchases other than Special Purchases. The Standard Rate is also charged on fees (if any) on which interest has become payable.

Misleading or what? How does that go with the headline: No interest. No hidden fees. plus the screenshot illustration showing 0% APR?

Visit www[dot]klarna[dot]com/uk/smoooth/

Further to the above, I made a complaint to the ASA about the content of the webpage. They replied a couple of days later, stating:

“The material is out of our remit because the technical aspects of non-broadcast advertising for most financial products, including car finance, are subject to statutory control by the Financial Conduct Authority (FCA). For that reason, we pass complaints about claims in this type of advertising to the FCA and that is what I’ve done with your complaint.

Please note that the FCA do not report their findings or contact consumers directly, but please rest assured they will take any necessary action if they consider that the ad is in breach of their requirements.”

Looking today at the Klarna webpage ../smooth/ , I note that only the first two options are now present. Small miracles can happen.

A recent Which? press release: “Which? calls for stronger safeguards to warn shoppers of Buy Now Pay Later debt risk

Which? is calling for stronger safeguards to stop online shoppers from choosing Buy Now Pay Later to pay for products without knowing the risks, as new research from the consumer champion reveals many people do not think that they are taking on debt when using this payment method.
Full press release: https://press.which.co.uk/whichpressreleases/which-calls-for-stronger-safeguards-to-warn-shoppers-of-buy-now-pay-later-debt-risk/

Credit cards have made it easy for generations to get into debt and BNPL makes it even easier. Many manage to avoid debt or keep it under control but it makes life miserable for many others.

Perhaps it would be better if it took a little effort to borrow money. Much though I would like retailers asking us if we really need a new phone before hitting the ‘Pay’ button perhaps BNPL could be made less inviting.

There are any humber of ways we are persuaded to use money we haven’t got, including “nothing to pay for…..months”. But just as bad, surely, is being encouraged to buy stuff we don’t really need, for example “ upgrade” to the latest version of a phone when your current one works perfectly well. Now who suggests that…?
But when you do get into debt, advice is on hand:
So, as they say, “that’s alright then”.

Well I support Which? in at least trying to warn shoppers of the risks of BNPL. It’s obviously important to be in a position to cope with unexpected expenditure.

I wonder what support there is from those who support sustainability and do not favour consumerism for the suggestion “ with a new model being released every year, Apple has its work cut out in creating something that catches people’s attention – especially if they’ve only had their current watch for 12 months or less.

Read more: https://www.which.co.uk/news/2021/12/new-apple-watch-series-7-is-it-worth-upgrading-to/ – Which?

Here is a recent press article prompted by the Which? press release: https://www.theguardian.com/money/2022/jan/06/buy-now-pay-later-customers-unaware-of-debt-risks-warns-which

I’ve just been listening to You & Yours (BBC Radio 4 programme on consumer issues), where the record interest rates for credit cards were discussed. The danger of delaying payment for purchases is clear.

If you do not pay for something when you acquire it, I do not see how anyone cannot regard that as a “debt”. Debt is money you owe.

I agree that BNPL should be regulated.

So what about hire purchase? Or a mortgage?

They are excellent ways of having the use of things you can’t afford, but you don’t own them until you’ve fully paid for them. Both hire purchase agreements and secured loans [mortgages] are fully regulated and impose a repayment discipline on the borrower default from which has serious personal and financial consequences.

Presumably credit card interest rates could be much lower if cardholders were not allowed a few weeks before having to make any repayment.

If they don’t make a full repayment then the interest is calculated from the date of commitment but the cost of this ‘free’ period [for those who pay off their CC bill in full each month] has to be recovered somehow and it must feed into prices for everybody [because of delayed receipts by retailers and credit card processing charges] as well as in high interest rates for those who do not pay in full within the specified period.

If we could turn back the clock to the days before credit cards, consumers generally could be better off; deferred payment could still exist via traditional hire purchase plans which only incurred extra costs for the individual customer in each purchase. HP also involved a structured repayment regime which made it more difficult to roll up further credit thus piling up additional debt. Furthermore, the goods bought on HP did not become the purchaser’s property until full payment had been made thus deterring irresponsible borrowing. A substantial initial deposit was also required before a purchase could be made “on the easy plan”.

It is argued that the availability of credit increases demand which, through the rise in the volume of supply, exerts a control over prices. Apart from being a dubious argument in the first place it doesn’t work when the system has reached saturation point which is now the case. The likelihood is that credit is currently over-running and the system only copes because people keep committing themselves to more debt; if they stopped it would collapse. BNPL has introduced another element of fluidity into the system which masks the fundamental instability of the economy and impacts more heavily on those who go into debt.

This, on the face of it, seems a reasonable scheme for those who need a significant and necessary purchase, have the income to repay but not the up-front capital. Cheaper than a personal loan and much cheaper than an overdraft or normal credit card charges.

But, like all credit, it needs to be entered into responsibly.

At least this is FCA-regulated but is another way of encouraging people to spend money.

There will always be a need for credit but rather than encouraging spending perhaps we should encourage people to save, so that if something unexpected happens they have the money available.

Likewise with appliance cover, it’s usually best to avoid monthly or annual payments and use the money saved to pay for a repair or replacement.

This seems like a useful facility. Presumably the fixed repayments will not remain as illustrated in the example if interest rates generally rise, which could happen at any time.

”….perhaps we should encourage people to save…
If your washing machine fails and you need a new one, many may not have the money saved up. This helps address that problem. It is all about people being savvy about their finances so do not fritter away money they don’t have on unnecessary purchases and then get into financial trouble.

BNPL is, we have been told, used mainly for fashion purposes and I presume that the same will apply with the alternative offered by Virgin. If it was targeted to help those who need help with essential purchases I would be more positive but this looks like another service that will encourage people to spend money they do not have.

We cannot dictate to people how they spend their money, but I do not see why there is a presumption that the Virgin scheme will be only used for fashion items.

”42% of 16-to-24 year-old used BNPL services last year
Of these 57% used BNPL to refresh their wardrobe and 47% used it to buy tech
“ according to https://www.thisismoney.co.uk/money/cardsloans/article-10403727/Buy-pay-later-used-42-Gen-Z-Britain-year.html
So that means 24% of 16-24 years old people used it to buy fashion, certainly not ” BNPL is, we have been told, used mainly for fashion purposes”. And no mention of the 24-100 years old consumers.

We cannot dictate to people how they spend their money. I see no reason to presume that the Virgin scheme will be largely used for fashion purchases.

Some may not like people borrowing money but many have to from time to time. We are not all able to save from meagre incomes, and situations arise that need dealing with. Giving lower cost credit is better than loading up a credit card charging 20-40% APR.

We do need to think about those less fortunate than ourselves, particularly when finances are going to be more stretched than ever for many. How do they get a new washing machine, cooker, if their existing one fails beyond repair?

My concern is that easy credit provides an incentive to spend rather than save and have money available when needed urgently. The article you have quoted offers warnings. If you can avoid debt you have more money to spend.

Perhaps if those who need to borrow money had to apply to borrow it, and hopefully shop around beforehand, we would have fewer people in debt.

I was clarifying the suggestion about fashion (not) being the predominant use. I was also pointing out that while some might misuse borrowed money there are others who need it for emergencies and are responsible in its use. We need to consider them. And, of course, those who normally use credit responsibly.