(Bloomberg) -- The head of Klarna’s UK business has criticized what he called “mind-boggling” and “irresponsible” research by Barclays Plc that called for stronger regulation of the buy-now-pay-later sector, the latest sign of the growing willingness of lenders to insert themselves into a market dominated by new entrants.
The bank published a press release Thursday with debt charity StepChange warning that 876,000 could fall into financial difficulties as a result of using BNPL products. It said retailers need to do more to examine these offerings and ensure customers understood the risks of unregulated lending.
In response, Klarna’s UK boss Alex Marsh said it was an attempt by the London-headquartered bank to push its own “high-cost” loan installment offering.
“It is mind-boggling and frankly irresponsible in a cost of living crisis, that Barclays should use StepChange to endorse their high-cost installment credit product which charges 10.9% interest and to lobby against interest-free and manageable Buy Now Pay Later products,” Marsh said in a statement. “The conclusions in this report from Barclays are hugely patronizing to UK retailers.”
Attention to BNPL lending is heating up as more consumers turn to the unregulated form of credit. The UK government announced on Monday it’s tightening regulation of the sector amid growing concern some users don’t fully understand the product.
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