Buy now, pay later warning as Apple and Zopa launch split payment options

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Brits should be wary of massive credit risks as Zopa jumped into the Buy Pay Later market today.

The loan company has launched its own BNPL plans like Klarna – which let customers spread their purchase costs in monthly installments – but money experts have issued a dire warning.

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Money experts have issued a stern warning not to trust BNPL too muchcredit: getty

Payment Method This means you can directly add the requested item to your basket while shopping online and your account will not be cashed out in a lump sum.

BNPL allows the hopper to splurge on the goodies, which usually take months to save when funds are visible.

Yet industry experts fear buyers are falling sharply loans through schemes,

an estimated Eight million adults owe money on BNPL purchaseAccording to the most recent data from the reference agency Credit Karma.

Buyers are sinking an average of £538 per person, with a total of £4 billion outstanding.

According to Citizens Advice, nearly two out of five BNPL shopkeepers have borrowed money to pay off their loans.

A quarter relied on credit cards, with others reaching out to friends and families, leaning on loans or dipping into overdrafts.

Young people are the worst offenders, as more than half of 18-34-year-olds borrowed to pay off BNPL loans, compared to 39 percent of 35-54-year-olds and 24 percent of those over 55.

The most popular BNPL providers – Klarna, Clearpay and Laybuy – have been running for some time on websites like H&M and ASOS.

The UK BNPL market is worth £6 billion and 20 million are already using this method of buying.

But the market is ready for shock waves when Apple arrives on the scene in autumn.

The tech titan will launch Apple Pay Later on its new iPhones in the US that will work with Apple Pay, both online and in store.

With this step people split payment In four installments on his phone, in six weeks.

Zopa, which launched its BNPL today, focuses on big ticket items worth between £250 and £30,000 to help consumers reach the purchase of their dreams.

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NatWest Also planning to start this service from this summer, Following HSBC And other banks are offering payment option.

Amazon teamed up with Barclays to offer BNPL for orders over £100.

Citizen Advice is now calling for more regulation to protect consumers, especially as one in 20 BNPL buyers do not fully understand how payments work.

Millie Harris, a loan advisor at Citizen Advice East Devon, said: “It’s just relying on one loan to pay off the other.

“It is very sad to see that parents who can’t afford their kids clothes or shoes buy it later, thinking it is doing them a favor.

“Actually it’s just more debt and more creditors than what they are already facing.

“What scares me the most is how easily people can use Buy Later and Pay Later.

“They rely on it more quickly than other forms of credit. It’s just a few clicks to checkout.

“It often means people don’t realize how serious it is; it’s credit and there are consequences if they don’t repay it.”

Dame Claire Moriarty, chief executive of Citizen Advice, said: “The spiral of debt from Buy Now pay later to credit cards, loans and even payday lenders shows that this is not a risk-free option.

“Buy now, pay later is part of the credit industry and should be regulated immediately.”



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