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NatWest ditches BNPL

NatWest ditches BNPL

British bank NatWest is killing off its buy now, pay later (BNPL) service less than two years after launch.

The bank will begin closing BNPL accounts from May after lower than expected take up, according to The Sun.

"We are focusing on our core lending products, helping customers spread the cost of their purchases through our credit cards, overdrafts and loans. This means our Buy Now Pay Later proposition will be closing," says a spokesperson.

NatWest jumped on the BNPL train in 2022, one of several banks moving into a sector that has been dominated by dedicated providers such as Klarna and Afterpay.

The use of BNPL has soared in recent years: a third of UK adults have now used the services, rising to 40% of 18-34-year-olds, according to a recent survey from the Centre for Financial Capability.

Meanwhile, the UK government has delayed plans to roll out a new regulatory regime for the sector.

Comments: (4)

Adedeji Olowe
Adedeji Olowe - Open Banking Nigeria - Lagos 10 March, 2024, 02:17Be the first to give this comment the thumbs up 0 likes

Did Natwest dump BNPL because the business model doesn't work or they screwed it up?

Jamie French
Jamie French - iTechArt - London 11 March, 2024, 10:09Be the first to give this comment the thumbs up 0 likes

BNPL was one of Monzo's revenue wins last year!

Vladimir Dimitroff
Vladimir Dimitroff - Senior Executives Forum - London 11 March, 2024, 11:271 like 1 like

@Adedeji Olowe: The model works, - quite well, thank you very much. But it's not as easy as doing nothing and charging interest for loans and credit cards. Banks prefer that model.

BNPL involves engaging merchants (who effectively extend the credit) and managing 3-way relationships, respective transactions and risks. That hated 4-letter word w-o-r-k ☹ 

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 11 March, 2024, 12:40Be the first to give this comment the thumbs up 0 likes

As I predicted in BNPL Ain't Killing Banks. It's Making Them Rich a few years ago, it's less work and more returns for banks to engage in wholesale lending to nonbank BNPLs than to get into retail lending directly to consumers.

In India, recent regulations like Reg UL have made life difficult for nonbank BNPL providers, and paved the way for banks to become more aggressive in this space. Going by the last line in the original article, I'm guessing lobbying / regulatory capture wasn't attempted / didn't work out in UK.