Consumers should be cautious when using Buy Now, Pay Later services - Senator Catherine Ardagh

Published on: 24 January 2024

Fianna Fáil Seanad Spokesperson on Social Protection, Catherine Ardagh, has said consumers need to take care when opting to purchase products through Buy Now, Pay Later (BNPL) services. 

Two prominent apps offering BNPL services in Ireland are Klarna and Revolut. Klarna initially began offering BNPL in Ireland in 2021 and Revolut, which has been downloaded by over 2 million people in Ireland, launched BNPL services in Ireland in June 2022. 

BNPL is a credit arrangement that allows a consumer to buy goods or services and to spread the cost over a period of time, usually months. Increasingly, it is being offered as an option to consumers to pay for anything from everyday items to items like clothing. 

Senator Ardagh said: “Buy Now, Pay Later services are not new. Many of us remember paying for things with in-store credit, for example, over a period of time. However, what is new is that it is now being increasingly advertised as a useful option for flexible online payments for all kinds of purchases.

"Because of the ease of activating Buy Now, Pay Later mode on apps that we all now use for everything from everyday purchases to collecting our wages, it might not be readily apparent to people that they are actually taking out a loan when they use the service. 
"People must be conscious that terms and conditions still apply to these loans and they must be paid back, even if the application for them can be very simple.

“The Central Bank of Ireland recently conducted research that showed just over a third of consumers surveyed didn't understand that Buy Now, Pay Later is a form of credit and not an actual payment and around one in five admitted to not having a full understanding as to how it works. 

“I am calling on providers of Buy Now, Pay Later, services to increase their advertising around the fact that consumers are actually taking out a loan that has to be paid back, so that situations where they inadvertently find themselves unable to pay are avoided.”



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