UK retail giant Frasers Group is eyeing up a widening of its activity in the payments space, apparently looking to take on the buy now, pay later (BNPL) sector in the process.
According to The Times, Mike Ashley’s high-street empire is pitching its Frasers Plus BNPL app to some of Britain’s biggest retailers in both the retail and online commerce sectors.
Prospective clients include Asos, Boohoo, Currys and AO, which The Times states Frasers is encouraging to accept Frasers Plus as a payments option at checkout. The newspaper states that Frasers is ‘understood to be close to announcing’ a partner, and has cited sources ‘close to Boohoo’ that the fashion retailer is considering adopting Fraser Plus.
Launched in January last year, Fraser Plus offers the group’s retail and online customers the adoption to pay in three separate instalments instead of one upfront payment. The repayments are subject to an APR 29.9% interest rate.
The product is available across the group’s full range of brands, which includes its flagship House of Fraser fashion outlet, as well as sports retailer Sports Direct and luxury clothes store Flannels.
The Times report came just two days before Frasers announced a rollout of the Plus payments option via a multi-year partnership with THG. This marks the first Frasers Plus adoption with an external partner – should The Times sources prove accurate, this could be the first of several.
Michael Murray, CEO Frasers Group, said: “Today we are pleased to announce a new strategic partnership with THG, which includes launching our consumer credit and loyalty proposition, Frasers Plus across the THG Ingenuity platform.
“This is an exciting step towards our Frasers Plus ambitions as we look to expand its offering across additional third-party platforms. We are looking forward to working with the THG team and unlocking further benefits for both businesses.”
Frasers Group’s expansion into BNPL is not too surprising given the rapid upsurge of the process as a popular payments method across various markets. According to finder.com, 50% of UK adults, equating to 26.4 million people, used BNPL to pay for goods and services in 2023, with many using the method for the first time.
The company which has arguably benefited the most from this surge in BNPL use is Klarna, a Swedish fintech, which Frasers may find itself competing against should it successfully step up its BNPL efforts.
On the other hand, BNPL is a very competitive market already with several major companies active within it. Some have opted to abandon the space altogether, such as NatWest, which earlier this year dropped BNPL from its offerings in favour of focusing on traditional lending products like credit cards.
