Virgin Money launching 'buy now, pay later' product, citing growing demand
The bank said it plans to enter the BNPL market later this year with Virgin Money Slyce, and any spend over £30 can be spread across three, six, nine or 12-month repayment plans. Paying back in three or six months will be fee-free, but charges will be applied for payments over longer periods, the bank also explained.
Fees will be charged as a percentage of the total amount a customer puts onto the plan, and users can also build their credit score while using Slyce.
Virgin Money said the product will be fully regulated and it will carry out credit and affordability checks before any spending starts. Hugh Chater, chief commercial officer, said: "It's clear that consumers now expect to be able to pay via buy now, pay later plans."
The company said in May as it revealed higher interim profits that hard-pressed households were turning to credit cards in greater numbers.
BNPL products can generally help people to spread the cost of purchases without adding to their overall cost. But there have been concerns that it can be relatively easy to build up large amounts of debt that cannot always easily be repaid.
More than two in five recent BNPL customers ended up borrowing money to make their repayments, according to recent research from Citizens Advice, while the UK government plans to change the law to bring some forms of unregulated BNPL products into Financial Conduct Authority regulation. In March, Royal Bank of Scotland owner NatWest said it planned to enter the BNPL market.
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