Barclays calls for more regulations on BNPL payments

British banking firm Barclays has expressed its concern regarding Buy Now, Pay Later (BNPL) products following new reseach that suggested the lack of assessment regarding the payment option has negatively effected customers.

The study by the bank found that many consumers taking out BNPL contracts were not in the financially stable position to do so, with 24 percent of BNPL users concerned about their ability to repay their related bills. Additionally, over a third of those choosing to pay with BNPL have done so due to insufficient funds in their current or savings account.

The problem especially arose among 18 to 34 year olds, with 34 percent of BNPL users in the demographic expressing a concern about their ability to pay back their loans and nearly a fifth having their credit score impacted due to missed payments.

Barclays is now calling on BNPL firms to introduce more robust affordability assessments to ensure customers are comfortably able to pay back their loans to avoid irresponsible, and often unknowledgable, lending.

“It’s essential that the new rules around BNPL regulation are fit for purpose and protect consumers from spiralling debut,” said CEO of Barclays Partner Finance, Antony Stephen, in the report. “Our research identifies the shortcomings of unregulated short-term, interest-free credit options and highlights that people are still not clear on the repercussions of not making repayments.”

He added: “Many of the UK’s largest retailers choose Barclays as their finance partner because they share our views on the importance of putting customer outcomes ahead of short-term profits. That’s why we’re calling for more consistency in the regulation, with a common framework applying to all consumer credit products.”