NatWest will end its buy now, pay later (BNPL) product May 7 due to lower-than-expected use of the offering.
This move comes less than two years after the British bank’s summer 2022 launch of the BNPL option, The Sun reported Thursday (March 7).
A NatWest spokesperson told the media outlet that the bank is closing the BNPL product so it can focus on core lending products like credit cards, overdrafts and loans.
The bank has informed customers who have active BNPL plans that the service will be shutting down and that their accounts will be closed when they have completed their repayment periods, according to the report.
Customers who have a credit card can use NatWest’s installment plans, which have proven to be more popular with customers than the bank’s BNPL plan, the report said.
Several BNPL products are available from other providers in the United Kingdom, per the report. American Express launched its Plan It BNPL in the country in February, joining existing offerings from Monzo, Klarna and several dedicated BNPL providers.
The U.K.’s Financial Conduct Authority (FCA) said in October that there had been a 10% increase in BNPL use in the six months leading to January 2023 amid the country’s cost-of-living crisis. The regulator added that 27% of British adults used BNPL at least once during that six-month span.
“Our research shows a significant increase in the use of BNPL over the past year,” Sheldon Mills, executive director of consumers and competition at the FCA, said at the time.
In December, Airbnb launched its Pay Over Time with Klarna option in the U.K. as part of a global rollout of that offering. The online marketplace for lodging said at the time that this alternative payment method allows guests to pay for their stay in three interest-free installments over two months.
When announcing that option, Raji Behal, head of Southwest Europe, U.K. and Ireland at Klarna, said there has been demand for the company’s flexible payment options.
“Airbnb tells us that one of the top requests from their guests is more ways to pay for their stays,” Behal said.
