NatWest to roll out buy-now pay-later credit as demand booms
NatWest is set to be the UK’s first high-street lender to move into the booming buy-now pay-later market as it rolls out a dedicated product for customers later this year.
The bank said the new BNPL offer would be available this summer and would allow shoppers to defer payments “anywhere that accepts Mastercard”.
Retail banking boss David Lindberg said there was clear demand for a safer BNPL product from banks.
“We have listened to our customers and are excited to provide them with a proposition that gives them greater flexibility to manage their finances,” he said.
“Customers told us they value fraud protection on purchases and useful tools and reminders to help them budget. They also like the convenience of managing buy now, pay later purchases alongside their other NatWest accounts in our award winning app.”
Bosses said they will be putting safeguards in place to “ensure lending is affordable” and stressed that transactions will also be covered by “all the protections customers expect from a fully regulated bank”.
The move from Natwest comes as demand for BNPL services has boomed in the past two years, spurred on by covid lockdowns as shoppers were forced onto online platforms and hunted for ways to spread their cash further.
BNPL payments are expected to account for nearly a quarter of all global ecommerce transactions by 2026, up from just 9 per cent in 2021, according to data from Juniper Research.
But the three main BNPL providers Klarna, Clearpay and Laybuy have come under fire from some campaigners for the fact they do not enjoy the same regulatory protections as credit cards and traditional regulated financial institutions.
Government is also preparing to clampdown on dedicated BNPL providers later this year after a review from former FCA boss Chris Woolard said there was an “urgent” need for regulation in the sector.
Swedish-headquartered Klarna, the biggest dedicated BNPL provider, also rolled out a physical card for consumers earlier this year to allow shoppers to defer payments in store and snap up market share from traditional card providers
NatWest’s announcement follows a move from Santander in January to rollout a dedicated BNPL product, Zinia, in Germany, with plans to expand the product across all its markets.