Frasers Group to offer BNPL services across its retail brands
Frasers Group is preparing to launch its own buy now pay later (BNPL) service for customers of the various retail brands owned by the company.
BNPL is a form of payment that allows customers to split the cost of purchases into smaller chunks paid over several months. While the market has been dominated by BNPL-focused fintechs like Klarna, Zilch, and Clearpay, other brands have been launching their own versions.
Apple, Revolut, Virgin, and more have all started custom BNPL services and Mike Ashley’s Frasers Group appears to be the latest entrant into the market.
Under the new service, called Frasers Plus, customers of Sports Direct, House of Fraser, Jack Wills, and other Fraser brands can defer the payment on purchases up to £2,000. The service will also include customer reward points.
In October of last year, Frasers Group led the £23m Series A funding round of the BNPL startup Tymit. A spokesperson at the time said the “strategic investment” would allow the group to “expand into the buy now, pay later market”.
Frasers will use the technology created by Tymit to build out its service, following the 28% acquisition.
UKTN has reached out to Frasers Group for comment.
Looming BNPL regulation
The move from the retail giant comes at a period of uncertainty for the BNPL market as looming regulatory changes look to address concerns over the technology.
The Financial Conduct Authority (FCA) has repeatedly warned consumers about the risks of using BNPL, often claiming that users do not appreciate that the service is essentially a type of loan and can lead to debt.
The government said last year it was preparing to introduce new regulations for BNPL, though it is unclear when they will be implemented.
One key regulatory change likely to take effect is the requirement of BNPL firms to report purchases to credit agencies, which means they will contribute to a user’s credit score as a loan would.
Klarna and Zilch have both already adopted this policy ahead of the rule change, though Zilch boss Philip Belamant previously expressed concerns to UKTN over how credit rating agencies could accurately process BNPL data. Zilch said it has been working with agencies to ensure they can handle the data “effectively”.