Heavy-handed regulation of Buy Now Pay Later services would be a mistake, says IEA expert

Responding to Financial Conduct Authority (FCA) review recommending regulation of Buy Now Pay Later services, such as Klarna, Victoria Hewson, Head of Regulatory Affairs at the free market think tank the Institute of Economic Affairs, said: 

“While the removal of regulatory barriers that deter the provision of credit in ‘non-prime’ markets by mainstream lenders is a welcome recommendation, extending new barriers to Buy Now Pay Later providers threatens competition and innovation, and could deprive consumers and merchants of this useful service altogether.

“The FCA has been criticised in the past for lacking a good evidence base for its measures to prevent mis-selling of financial products. An outcomes based approach as recommended in the report could help counter this, if well-directed.

“There is also the risk that heavy-handed regulation could leave only the relatively affluent able to readily access lawful credit.”


Notes to editors

For media enquiries, please contact Emily Carver, Head of Media, on 07715942731 or [email protected].

IEA spokespeople are available for further comment and interview.

The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.

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