Revolut is piloting a new ‘buy now, pay later’ service in Ireland beginning this week.
Read also: Klarna in conflict with Barclays over ‘Irresponsible’ Buy-Now-Pay-Later research
Revolut has shrugged off the recent gloom about BNPL – higher interest rates, tighter margins and increasing regulation – with the rollout of what it calls simply a Pay Later product.
The digital bank has said its “Pay later” service will charge a fee of 1.65% per purchase, which is repaid as part of the final two instalments.
The “responsible instalments” product will let a trial group of its 1.9 million customers in Ireland – almost half the adult population – spread the cost of purchases up to €499 ($760) across three instalments.
However, the concerns about the possibility of consumers, particularly young people, ending up in debt grow, Revolut has said its new will set specific credit limits for some customers.
The company said it will also check affordability by linking to customers’ existing bank accounts through the app.
If successful, the Pay Later product will be expanded into Poland and Romania, and from next year potentially into other markets, which may include Australia, where Revolut has acquired a credit licence.
Joe Heneghan, CEO of Revolut Europe, emphasised the affordability aspect, saying Revolut Pay Later “encourages people to pay within two months, rather than calling on overdrafts and credit cards which don’t carry the same emphasis on quickly paying back the amount borrowed”.
Pay Later would also be quarantined from other features of the Revolut App, such as trading shares or cryptocurrencies. And merchants involved in gambling might be restricted from participating.
