Revolut Takes ‘Buy Now, Pay Later’ Trend one Step Further in Europe
Revolut, a British fintech company offering digital banking services, has announced the rollout of a new “buy now, pay later” (BNPL) service across Europe. The offering will first be made available in Ireland and then gradually extended to other European countries, with deployment in Poland and Romania planned by the end of 2022.
BNPL is a short-term financing model that allows clients to purchase products and pay for them at a later time, usually in installments and with no interest fees. Unlike traditional credits, BNPL services are easy to qualify for, manageable via an app, and adjusted to the customer’s budget. However, they usually come with a fixed fee, and the conditions may vary according to the provider.
Along with the digitalization of financial services, neo-banking, and decentralization, the BNPL trend is rapidly gaining traction, with analysts expecting the market for this type of service in Europe to grow to £680 billion (about €790 billion) over the next five years. Afterpay (Australia) and Klarna (Sweden) are two of the established BNPL providers, with startups such as Zip, Sezzle, and Affirm now making their way into this field.
Joe Heneghan, chief executive for Revolut Europe, declared that these types of products “give customers more control and flexibility over their personal finances, in a responsible way, by enabling them to spread the cost of purchases.” However, regulators are concerned about the prospect of giving customers easy access to cheap credit. Moreover, such services are currently not fully regulated, and various governmental agencies are currently trying to set up regulatory frameworks and supervisory bodies for BNPL services.
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