Buy-now pay-later firm Laybuy said it was on track to hit profitability this year as it reported a 32 per cent surge in the amount of cash it brings in per customer.
In figures shared exclusively with City A.M., the Kiwi firm said its gross merchandise value (GMV) had hit £64m in the UK as its average spend per customer jumped in the first six months of its financial year.
Gary Rohloff, boss of the Aussie-listed firm, which is currently active in the UK, New Zealand and Australia, said the UK had driven growth across the firm.
“The UK remains our growth engine and we’ve made significant progress over the past quarter and are on target for profitability by the end of the financial year in March,” he said in comments shared with City A.M.
Default rates has tumbled to 1.5 per cent of GMV meanwhile on the back of investment into its fraud and credit risk management tools, Laybuy said, down from 2.8 per cent in the first quarter of the year and nearly five per cent in the final quarter of last year.
Laybuy has also tightened its lending criteria for customers amid fears that shoppers are taking on dangerous levels of debt through BNPL products offered by firms like Laybuy and peers Clearpay and Klarna to cope with a cost of living crunch.
Laybuy was among a host of BNPL firms to commit to sharing customers’ data with credit reporting agencies this year in a bid to ramp up transparency around the unregulated products. The FCA is set to regulate the products but specific rules are not expected until 2024.
The speed of movement has fuelled concerns of mounting debt levels as customers use the products to ease the burden of payments as the cost of living rises.
The figures came as separate statistics revealed that consumers are increasingly leaning on BNPL and payment plans to pay for Christmas gifts.
Research from Oracle Retail found that 55 per cent of UK shoppers are considering using store financing or payment plans to pay for gifts this holiday season.