With the Financial Conduct Authority’s crackdown on buy now, pay later companies beginning earlier this week, Retail Week asks experts if regulation will destroy this rapidly growing sector.


Andy Harding

Andy Harding, UK managing director, Openpay

At Openpay, we welcome the UK regulatory oversight of buy now, pay later (BNPL) and look forward to further engaging on consumer protection with the Financial Conduct Authority (FCA).

Anyone who has read The Woolard Review could not conclude that regulation will destroy BNPL. The report recognises that credit is a vital function within any healthy economy and BNPL is the latest in a long line of financial innovations. 

Consumer-centricity and responsibility are core to Openpay’s business, and we ensure our products are designed to be beneficial and fair for consumers providing flexible plans with no hidden catches.

Every customer undergoes a credit check, we provide clear and frequent payment reminders and cap our late fees, and customers cannot take out additional plans if they fail to make a payment.

We also have a hardship policy for any consumers facing a change in their financial circumstances.

Looking at the economic destruction the Covid-19 pandemic has caused, particularly that of the retail sector, BNPL has played – and will continue to play – a pivotal role in enabling consumers to manage their cashflow.

As one of the highest-rated BNPL providers on Trustpilot, we know our customers are financially savvy and use Openpay as a cashflow management tool.


Kate Hardcastle

Kate Hardcastle, retail consultant

Buy now, pay later brands offer more than an opportunity to spread the cost for consumers. They can take the frustration out of the wait for a refund of ‘real-life’ funds.

Consumers are noticeably vocal on social media that some retailers have creaky operations, and further pressure from the surge in online sales is creating longer than usual delays in refund processing.

Some BNPL enables users to freeze a payment for a return, offering savvier customers the opportunity to try without buying, as well as spreading costs in the short term without interest.

With fourfold growth over the last year, BNPL culture is here to stay, and with operators like Klarna accepting that tighter regulations are required, the offer should be there for those who can afford to use it without any risk to the financially vulnerable.

I have always maintained that education of teenagers should include more relatable real-life lessons, bringing focus to essential areas such as nutrition and finances.

If our BNPL lenders are as responsible as they claim to be, as well as the glossy, celebrity-endorsed adverts we should hope to see more help and clarity from them on the other options to BNPL, educating shoppers to budget with responsibility.

Consumers have made it clear that they want to engage with socially responsible businesses – here is a pivotal opportunity for how this industry can help.


Radojev, Hugh

Hugh Radojev, senior reporter, Retail Week

The real problem with buy now, pay later firms is that they have lured a small number of usually younger customers into unwittingly taking on credit score-ruining debt in the pursuit of the latest trends they can’t afford. 

Money Saving Expert’s Martin Lewis, who has been at the forefront of the push to regulate the buy now, pay later sector, encapsulates the problem better than I could: “Now this has been marketed often at young people and has been discussed as a lifestyle choice in some places.

“But it is not. It is a debt. It should be treated as a debt and if you treat it as such, it can be good. But it can also be bad – debt collectors can come to you if you miss a payment.”

There’s the rub. It’s one thing for a financially secure person to pay off a new sofa or top-of-the-line white good in instalments. It’s another thing for a teenager, with little understanding of credit, to do the same for some trainers.

Regulation won’t destroy the sector, but it might just protect a young person from permanently damaging their credit score and future prospects. That can only be a good thing in the long run.