Britons are increasingly turning to buy-now, pay-later (BNPL) services to fund their purchases, with market activity surging nearly 20% to approximately $27 billion last year. This trend is largely driven by international players like Klarna, PayPal, and Affirm, as well as local retailers launching their own BNPL options. While this model allows consumers to make purchases without interest or credit checks, the competition among fintech companies is intensifying, which could squeeze profit margins. The UK BNPL market has grown tenfold since 2019, fueled by the cost-of-living crisis and higher interest rates on traditional credit. However, as the sector matures, the UK government is preparing to impose regulations to prevent consumers from accumulating unmanageable debt. This could lead to consolidation in the industry, with smaller players potentially exiting the market. The balance between consumer convenience and regulatory compliance remains a significant challenge for BNPL providers.
Read the full article here.