British fintech Revolut is set to join the burgeoning BNPL space with the roll-out of its new Pay Later feature.
Beginning the first phase of its launch across European markets, Revolut’s BNPL offering allows customers to spread costs across three instalments categories with purchases of up to €499 (£430).
The fintech stated that the first payment is paid upfront, followed by two instalment options across two months. Customers will be charged a 1.65% fee with every single purchase which in turn, will be repaid once the final two instalments have been paid for.
“Customers can use Pay Later at any merchant that accepts Revolut online or in store. Unlike other pay later products, merchants do not sign up to Revolut Pay Later, and Revolut does not charge them for Pay Later transactions,” stated a Revolut spokesperson.
Approved customers will be to check their balance on their phones to activate the BNPL feature ‘with one tap’, as the feature provides full integration with Revolut’s app.
Pay Later will be available for ‘early access’ to a select number of Irish customers for its first week, with Revolut assessing each customer’s bank accounts to provide them a ‘bespoke’ credit limit based on affordability and sustainability.
Joe Heneghan, Chief Executive of Revolut Europe, commented: “Revolut Pay Later gives our customers more control and flexibility over their personal finances, in a responsible way, by enabling them to spread the cost of purchases over three instalments.
“This encourages people to pay within two months, rather than calling on overdrafts and credit cards which don’t carry the same emphasis on quickly paying back the amount borrowed.”
Debates surrounding the affordability of BNPL services have intensified this past month, with the UK government enforcing stricter affordability checks so that lenders can accurately apply for the credit loan.
This comes as the BNPL sector has such a significant rise in usage pre-pandemic, it has also seen heightened calls and actions for more regulatory frameworks.
Economic Secretary to the Treasury, John Glen, said: “Buy-Now Pay-Later can be a helpful way to manage your finances but we need to ensure that people can embrace new products and services with the appropriate protections in place.
“By holding Buy-Now Pay-Later to the high standards we expect of other loans and forms of credit, we are protecting consumers and fostering the safe growth of this innovative market in the UK.”