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Surge in pay-later deals stokes fears of debt crisis

Buy-now-pay-later deals have exploded in popularity during the pandemic, prompting fears of a looming debt crisis among the young and unemployed. Some 9.5m people now pay using Klarna, a Swedish lender that has signed up 2.5m customers since the start of March.

Pay-later deals have become commonplace at online retailers from Marks & Spencer to Topshop but have also started being offered at hairdressers, dentists and gardening shops, as well as companies selling addictive substances online, since the start of the pandemic.

Tags

bnpl, lending, credit, debt