Klarna defends use of BNPL solutions

Klarna has backed using buy-now pay-later (BNPL) solutions for essential items, according to a report by City A.M.

The news comes after the Financial Conduct Authority (FCA) issued a warning over the promotion of Buy Now Pay Later solutions throughout the cost-of-living crisis.

The FCA warned BNPL firms that it was their duty to provide “fair and prominent warnings of any risks to customers” and the fact they are taking on debt.

A spokesperson for Klarna told City A.M.: “For years people have been shopping for their groceries and other essentials on their credit card, but they’ve been stung with nasty fees and sky-high interest rates – people are realising that BNPL products like ours offer a better value alternative, with no interest and no fees.”

They added: “Our products are built to stop people getting into long term unmanageable debt; we restrict the use of our services after missed payments to stop people from racking up debt, we only loan a small amount and gradually increase it if our products are being used responsibly, and we make a new lending decision each time someone wants to use Klarna.”

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