UK clamps down on 'wild west' of buy now, pay later sector with new rules

Klarna is synonymous with the "buy now, pay later" trend of making a purchase and deferring payment until the end of the month or paying over interest-free monthly installments. The U.K. government on Monday laid out proposals to bring short-term loans under formal rules as it looks to clamp down on the "wild west" of the buy now, pay later sector. Fintech firms like Klarna and Block's Afterpay have flourished by offering interest-free financing on everything from fashion and gadgets to food deliveries — while at the same time stoking concerns around affordability. The space is highly competitive, with U.S. player Affirm launching in the U.K. just last year. City Minister Emma Reynolds said in a statement Monday that the U.K.'s new rules were designed to tackle a sense of "wild west" in the buy now, pay later (BNPL) space, adding the measures "will protect shoppers from debt traps and give the sector the certainty it needs to invest, grow, and create jobs." Under the U.K. proposals ... Read full article.