Buy now, pay later (BNPL) firm Clearpay has launched a new personal spending limit feature to safeguard customers from overspending beyond their means.
Clearpay’s Spend Cap, launched on August 6, provides customers with a two-step guide within its app to set their own maximum spend limits.
The idea behind the new product launch is to encourage customers to proactively manage their spending and be wary of overspending on services and goods they may not be able to afford, Clearpay said.
“A significant number of Brits are turning away from traditional borrowing products, citing confusion on how they work and how fees are calculated,” said Rich Bayer, UK Country Manager at Clearpay.
“At Clearpay, we prioritise transparency and giving our customers control over how they spend. With BNPL regulation on the horizon, we expect more people to be using Buy Now, Pay Later as their preferred payment option.”
BNPL vs. credit cards
One of the core reasons behind the launch of Spend Cap was Clearpay’s acknowledgment of a trending shift among UK consumers away from traditional credit cards, opting to pay for goods in instalments.
Clearpay research found one in five (20%) UK consumers are “actively trying to reduce their credit card usage”, with 44% of those surveyed calling for a product which charges no interest at all.
Furthermore, 29% of UK consumers prioritise a payment option which enables them to budget more easily in light of rising inflation over the past several years as consumers have endured a recent cost-of-living crisis.
Credit card spend in the UK stood at £249bn in 2024, an increase of 5.3% from 2023 according to UK Finance. There were more than 163.4 million credit cards in issue, an increase from the 159.7 million in circulation.
Meanwhile, two in five UK adults (22.6 million) have used a BNPL service at some point since 2024, according to Finder research, an increase of 36% from 2023. With the instalment-based payment method still in its relative infancy, it is already becoming a favourable option for customers, particularly younger generations.
Regulations in 2026
However, unlike credit cards, BNPL has typically flown under the regulatory radar in the UK.
This is set to change in 2026, as the government announced plans for legislation to regulate the BNPL market.
The Financial Conduct Authority (FCA) intends to provide more customer protection provisions to help curb overspending with BNPL. One of the regulations includes affordability checks on customers to see if they can afford to repay their loans.
