Laybuy launches its buy now, pay later service in the UK with Footasylum
New Zealand's buy now, pay later service Laybuy has launched in the UK in partnership with footwear and sportswear retailer Footasylum.
The service allows shoppers to purchase an item by only paying a sixth of its cost upfront and paying the rest in equal weekly instalments with no financial penalty for doing so.
To qualify customers must first undergo a credit check with Experian after which they are given a spending limit of between £60 and £720. If customers wish to spend more they can put in the difference in cash and customers who fall behind on payments will have their accounts frozen.
Footasylum said the service was likely to appeal to its young customer base enabling them to spread the cost of their shopping. “Laybuy’s proposition represents a unique offering for our customer base. We believe that by providing customers with a means of paying for our products over time as part of their weekly budgeting, this partnership will be a positive step forward for us,” said the chain's CEO Clare Nesbitt.
The proposition differs from that of Swedish disruptor bank Klarna – which has been making significant in-roads in the UK market with its buy now, pay later option – which has been adopted by etail giant ASOS and menswear chain Moss Bros among others.
Klarna's service allows customers to order items at no cost, try them at home and only pay for those that they keep. It also offers a Slice it in 3 service, that allows shoppers to pay for items in three equal instalments at no extra charge. Arcadia has rolled out this service across all of its brands. The Klarna services can be offered both in-store and online.
Laybuy founder and managing director Gary Rohloff has said that his company is also looking to roll out an in-store buy now, pay later service, and has been quoted in reports saying that given the differences in the Laybuy and Klarna offer, retailers could offer both options to consumers.
“Our research here in the UK indicates that there is a demand for weekly repayment options – in fact, this is the most common way for people to budget. Given this, we’ve developed a solution that allows shoppers to buy now and pay back over a short period of time in manageable repayments at no additional cost,” Rohloff said.
Flexible payments are growing in popularity as retailers view them as a way to attract customers without offering discounts.