Klarna, a payments business, has launched a scheme to eliminate late payments among its UK borrowers.
The Swedish buy now, pay later (BNPL) supplier has revealed that, unlike to other nations, it has never imposed a late fee in the United Kingdom. That is about to change.
“We’re concerned that not collecting fees encourages the improper conduct,” said Alex Marsh, director of Klarna’s U.K. operations.
According to Marsh, the lack of late penalties provides customers less motivation to pay on time, causing them to fall behind.
“It’s like a city with no parking charges; it sounds nice, but in actuality it’s not so great,” Marsh explained.
Payments by 25% in Belgium and the Netherlands. That’s why it’s proposing a minor price for late payments in the United Kingdom, as well as mechanisms to prevent missing payments completely.
Automatic payments, payment reminders, and a seven-day grace period before charging a fee are among the features available. Moreover, Klarna will utilise the fees collected to assist customers who have fallen behind on their payments.
“Under the Customer Recovery Programme, which will debut later this year, Klarna will proactively approach customers with long-overdue payments and offer to forgive 50% of their sum,” according to the press release.
