Welcome to The Current Account! We hope you enjoy our latest round-up of the top news stories from the industry.
Headlines from the banking sector this month
In this month’s edition, we’re focusing on the tightening regulations for Buy-Now-Pay-Later products, as well as the reduced access to cash.
Regulations tightening on BNPL products
- The BNPL sector is becoming more competitive as a number of banks enter the market. New players such as Apple Pay Later are also asserting their authority, and are set to launch in the US later this year
- The cost-of-living crisis could see customers become more reliant on this form of consumer credit. Recent research from Barclays highlights their concern for a significant number of customers who are getting into unmanageable debt from BNPL schemes
- This seems to be hitting young people hardest, as research shows a high number of users need to take out different types of credit to pay off BNPL debt
- Banks are entering the sector with a more regulated perspective. Revolut are marketing their newly launched BNPL product as a responsible payment product, as it uses an approved credit limit that takes affordability into consideration
- This comes just as a new Buy-Now-Pay-Later regulation has been announced by the government, which will require lenders to ensure loans are affordable. Adverts also need to be clear, fair and avoid misleading potential users