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Klarna is a synonym of the “Buy Now, Pay Later” trend “make a purchase and postpone the payment by the end of the month or pay for defenseless installments.
Nicholas Kokolis | Nurphoto | Gets the image
The UK government on Monday has outlined proposals for making short -term loans under official rules as it is supposed to squeeze on the “Wild West” buying now.
Finthhi -firms such as Klarna and Block AfterPay has flourished by offering free financing everything: from fashion and gadgets to food delivery-at the same time inciting affordability problems. Space is very competitive with American player State Launch in the UK only last year.
In a statement on Monday, City Minister Emma Reynolds said the new UK rules were developed to address the “Wild West” in the purchase now, to pay later (BNPL) space, adding measures “to protect the buyers from the debt and give the sector the confidence it is necessary for investment.
According to UK proposals, BNPL companies will have to check that people can return what they borrow and facilitate customers access to money back.
Consumers will also be able to complain the BNPL complaints to the financial ombudsman, the UK parliamentary services to resolve the disputes between consumers and financial services.
The rules are expected to take effect next year, according to the government.
Klarna said it has long been supported by calls to bring BNPL into a regulatory plot. “It is good to see progress in regulation, and we look forward to cooperating with the FCA over consumer protection rules and encouraging innovation,” said CNBC’s press secretary.
“Adjustment will give clarity and sequence of the sector, establishing consistent working conditions and standards for the requirements for all providers,” said ClearPay press, British ARM ofPay.
“It will also create a more sustainable fund for the future of BNPL as it continues to grow as a daily payment for consumers.”
While buying now, the firms are later paid publicly supported by the regulation, many concerned that the regulators apply outdated rules to their business models. The Consumer Loan Act governed by lending and borrowing in the UK has existed for over 50 years.
For its part, the government has stated that it plans to adapt the law on consumer loans to allow “a modern, proprietary basis that reflects how people borrow today.”
