Klarna, the Swedish financial company that handles the credit payment process for Xbox All Access packages in the UK, is facing government regulation following a report by the Financial Conduct Authority.
The Woolard Review, which was commissioned by the FCA to investigate buy-now, pay-later credit agreements such as those offered by Klarna, found that while BNPL products promise split payments with no interest, it would be “relatively easy” for a consumer to amass £1000 of debt by using multiple BNPL lenders.
“BNPL providers are looking to widen their scope from predominantly fashion and accessories, and are starting to partner with higher value retailers, including homewares and household electricals,” the report said. “This could increase average transaction values and therefore outstanding balances.”
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