Amazon customers from the United Kingdom can now pay later for their orders through a partnership with Barclays, the British bank. The new payment service called ‘Instalments’ was already introduced in Germany last year. ‘Buy now, pay later’ is becoming increasingly popular in Europe.
The payment service is an important contender for Klarna, another leading provider of ‘buy now, pay later’ (BNPL). However, the growing popularity of paying in installments in Europe has also fueled consumer debt.
Spread payment in 3 to 48 months
With the new payment method, UK customers can spread their purchase across installments in a period of three to 48 months. The service is only available for orders of 100 pounds and above.
The service is only available for orders of 100 pounds or more.
According to the press release, shoppers can pay for millions of products with the reusable credit account, including the items of thousands of third party sellers on Amazon. However, the payment method is not available for gift cards, digital products, groceries, pre-sale products and out-of-stock items.
Charged annual interest of 10%
To be approved for purchase on account, users will have to provide information about their income and employment status. Customers will also need to be over 18 years old and have been a UK resident for at least 3 years, for example. If approved, Amazon shoppers will have the option available at checkout ‘as long as they remain within their overall credit limit and monthly payment limit’, the statement says.
Barclays charges interest over the payment period, unlike other providers.
Unlike other providers of BNPL-services such as Klarna, Barclays charges interest over the payment period. There is an annual percentage rate (APR) of 10.9 percent for purchases via Amazon.
‘Buy now, pay later’ is growing in Europe
The ‘buy now, pay later’ (BNPL)-method was launched in Germany only last year, also in cooperation with the German branch of the London-based bank. The German and now UK launch is part of a growing market for BNPL in Europe.
After all, nearly one third of Germans that shop online purchase on account. And in the UK, one in five consumers plan to pay later for this year’s Christmas orders. A fluctuating economy as a result of the Covid-19-pandemic has further boosted the BNPL-market.
Towering debts
The increasing popularity of ‘buy now, pay later’ has an important flip side though, as it results in towering debt for consumers. For example, during the pandemic, UK online shoppers have racked up over 4.7 billion euros of debt due to BNPL. The UK Advertising Authority has even banned ads of Klarna, one of Europe’s leading BNPL-providers. This will undoubtedly remain a point of concern for the growing market.
‘Buy now, pay later’ increases debt for consumers.
