NewDay Launches BNPL Credit Account for UK Customers

U.K. consumer credit provider NewDay has introduced Newpay, an instant access digital credit account to provide buy now, pay later (BNPL) payment options for customers, according to a Tuesday (Nov. 16) report from FinTech & Finance News.

Newpay is regulated by the U.K.’s Financial Conduct Authority (FCA) and provides credit limits up to £5,000, according to the company website. Purchases can be made at a variety of retailers, with all transactions housed in the same account.

Customers make only one monthly payment, regardless of the number of purchases made, and can choose monthly installment plans ranging from six to 24 months. Based on a customer’s credit history, these installment plans can either be interest-free or include a variable interest rate, per the report.

The Newpay credit account differs from most BNPL offerings in that interest can accrue for some customers, whereas most BNPL options offer interest-free installment plans, according to PYMNTS.

Particularly since the start of the pandemic, more consumers are opting for BNPL offerings. Within the last 12 months, 14% — or more than 28 million online shoppers — paid for internet purchases through BNPL at least once, according to PYMNTS.

Read more: BNPL’s Future in Digital Banking, Rue Gilt Works on Serving Customers, the Future of Digital Luxury

For many consumers with lackluster credit scores, BNPL is a much-needed second chance. PYMNTS’ recent study, which surveyed 7,024 American shoppers, determined that 23% of American adults need a second chance to obtain affordable payments that a higher credit score could otherwise provide.

Of those shoppers needing another opportunity to gain lower payments, 30% earned more than $100,000 per year, according to PYMNTS data.

PYMNTS’ research also found that 47% of consumers who were aware of BNPL programs would consider using it to pay for expensive one-time purchases, while 29% said they would use the installment payments to pay for medical bills.

Related: Buy Now Pay Later Providers See Future in Becoming ‘Tech-Enabled’ Digital Banks