Payments company Klarna has started a programme to stop late payments from happening to its UK borrowers.
In contrast to other countries, the Swedish buy now, pay later (BNPL) provider has admitted that it has never charged a late fee in the United Kingdom. That will soon alter.
According to Alex Marsh, head of operations at Klarna in the UK, “We’re worried that not collecting fees promotes the unethical activity.”
According to Marsh, the absence of late fees deters consumers from making on-time payments, which causes them to fall behind.
According to Marsh, “It’s like a city with no parking fees; it sounds lovely, but it’s not that fantastic.”
Payouts in Belgium and the Netherlands are reduced by 25%. It is recommending a small fine for late payments in the UK as well as safeguards against altogether skipping payments as a result.
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.
