Britain will soon lay out new plans to regulate 'buy now, pay later' firms like Klarna after delays

Core Viewpoint - The U.K. government is preparing to implement stricter regulations on the "buy now, pay later" (BNPL) industry to protect consumers and provide certainty for the sector [1][2]. Group 1: Regulatory Developments - The new Labour government in the U.K. will soon announce updated plans for regulating the BNPL industry, as confirmed by a Treasury department spokesperson [1]. - Tulip Siddiq, the new economic secretary to the U.K. Treasury, indicated that the government aims to collaborate with stakeholders and will outline its plans shortly [1]. - The push for regulation follows previous delays in the legislative roadmap, with initial plans set out in 2021 after a review highlighted that over 10% of BNPL customers were in arrears [1]. Group 2: Industry Characteristics - BNPL plans allow consumers to purchase items and defer payments, typically requiring one-third of the purchase value upfront, with remaining payments due over the next two months [2]. - Most BNPL companies generate revenue by charging fees to merchant partners per transaction, rather than through interest or late payment fees, although some do impose missed payment fees [2]. - The lack of standardization among BNPL providers has led to calls for regulation, particularly as younger consumers are accumulating debt from multiple providers without the means to repay [2].