Adoption of buy-now-pay-later services is predicted to surge to more than 900 million users around the world by 2027, but the regulatory oversight of this growing industry leaves much to be desired, argues Corlytics founder and CEO John Byrne, who considers whether a new UK rule could set a worldwide baseline.
Buy-now-pay-later (BNPL) services like Klarna are no longer flashy, new fintech innovations; they have become the new normal for millions of users across the globe. The uptake in usage of BNPL services marks a significant shift in how consumers finance everyday items.
BNPL is reshaping consumer credit, quickly becoming a mainstream form of credit that operates outside of a traditional regulatory framework. Worldwide, companies are rapidly adopting BNPL methods of payment.
Despite the mass adoption, many countries have not yet regulated the fast-growing industry, projected to reach more than 900 million users in the next couple of years, exposing consumers to unmitigated credit risks.
Without a legal structure to protect user rights, consumers may fall into debt traps, where they are unable to pay off their debt in time and are charged high late fees. A recent LendingTree survey indicated that more than two in five BNPL borrowers paid late in the past year. Additionally, without regulations,…
