By John Reynolds on Tuesday 22 March 2022
The high-street bank will launch its buy now, pay later venture in the summer, saying it's set to be the first high-street bank to move into the alternative credit sector.
NatWest is entering the buy now, pay later market, pledging to make it “better” and “safer”.
The high-street bank will launch its buy now, pay later venture in the summer, saying it's set to be the first high-street bank to move into this alternative credit sector.
It will mean its customers can split their purchases into several repayments.
It will go up against the likes of Klarna, Clearpay, Laybuy and other startups, which are trying to make hay in the sector, which is becoming increasingly popular.
According to Equifax research, more than 2.5m new people in the UK used such services in over 10 months last year.
While its popularity has surged, critics argue that buy now, pay later encourages users to get into debt who can't afford to.
NatWest said its proposition would mean customers can use its buy now, pay later offering “almost anywhere that accepts MasterCard”.
Initially, it will be rolled out to NatWest customers, and then likely to customers of sister brands RBS and Ulster Bank.
Its launch comes as the buy now, pay later sector will soon face closer scrutiny as the sector becomes regulated by the Financial Conduct Authority (FCA).
David Lindberg, CEO of retail banking at NatWest, said: “There’s a clear demand for buy now, pay later and we are determined to make it better and safer.
“We have listened to our customers and are excited to provide them with a proposition that gives them greater flexibility to manage their finances. Customers told us they value fraud protection on purchases and useful tools and reminders to help them budget."
The bank says it has put in place safeguards to help ensure lending is affordable and that transactions will be covered by all the protections customers expect from a fully regulated bank.
The proposition will offer structured repayments, though NatWest did not reveal specific details of repayment schedules.
Credit scoring and affordability checks will also be features of the offering.
“By offering a fixed credit limit, that the customer will know in advance, they will be able to plan their purchases with confidence," NatWest said.
“The bank’s mobile app will help customers effortlessly use and manage their buy now, pay later product, enabling customers to monitor their repayments, view their outstanding balance and send notifications to help keep on track with payments."
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