John Lewis launches its own "buy now, pay later" service

Department store giant John Lewis has launched its first ever "Buy now, Pay later' checkout option, aiming to satisfy a surge in demand for interest free credit options.

Customers will be able to sign up for between £1,000 of credit and £25,000 for 12 months, reports Mail on Sunday.

John Lewis has brought in banking group BNP Paribas to help launch the service in the UK, promising a "no arrangement fees or hidden extras" approach.

John Lewis Chairwoman Sharon White has committed £400 million to expand in areas where the company is not well represented. White aims to also generate 40% of future profits from non-retail sectors, such as financial services, by 2030.

Since 2013, the company has operated its own credit card, which has offered credit in its John Lewis shops, but never before online.

The rollout of the new credit option is a reaction to the success of various "Buy now, Pay later" services, such as Klarna, Clearpay and Zip.

According to recent research from Klarna, the ability to pay flexibly has grown in importance in 2020, according to 45% of respondents this can be a real dealbreaker. Four in ten (42%) prefer to shop from brands or retailers that offer flexible payment options, while three in ten (32%) won’t shop from those that don’t.

John Lewis is considering further stores closure as the COVID-19 pandemic has forced more of its sales online. The department store could announce up to eight further store closures or relocations to smaller sites when it reveals its annual results on this week.