US fintech Block, co-founded by Twitter founder Jack Dorsey, is adding buy now, pay later (BNPL) services for UK customers via an integration with subsidiary Clearpay.
Block’s flagship product Square provides business management software, largely to retail companies, offering ecommerce tools and embedded financial services.
Now the US company is entering the crowded UK BNPL space through a partnership with Clearpay, known outside of Europe as Afterpay. Block, formerly known as Square, acquired the UK-based firm in January, with the intention of integrating its BNPL functionality.
Square will offer BNPL services via Clearpay as part of its suite of services to clients in the UK, allowing both in-store and online BNPL purchases.
“The integration across platforms furthers our goal to give sellers of all sizes omnichannel tools that help them to grow by meeting consumer shopping habits, whatever and wherever they are,” said Alyssa Henry, head of Square.
“Clearpay provides our ecosystem with a new tool beyond an alternative payment method; it enables an omnichannel commerce solution that can offer true value to our sellers.”
Rise of BNPL
BNPL is a payment method that splits the cost of purchases into smaller amounts that are paid over a longer period.
The popularity of BNPL purchasing has skyrocketed since the pandemic, reaching $120bn (£95bn) globally last year.
While a number of BNPL-focused fintech companies including Klarna and Zilch have found success, Square’s integration of Clearpay is the latest example of an established tech company entering the BNPL space.
The concern stems from the risk of consumers taking on unmanageable debt through BNPL purchases that might not show up on their credit score.
The government has outlined plans to regulate BNPL, following calls from the Financial Conduct Authority (FCA). However, it is unclear when legislation will be brought to make the new regulations official.