NatWest is set to axe its Buy Now Pay Later (BNPL) option less than two years after its initial rollout.
The British bank, with over 18m users, is set to begin closing BNPL customers’ accounts from May 7 this year, according to a report from The Sun.
Allegedly, the decision has been made due to lower than expected use of the offering, which was initially launched to much fanfare.
Speaking on the news, a NatWest spokesperson told Finextra, “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.”
Popularised by apps such as Swedish firm Klarna, BNPL services enable consumers to defer or distribute the cost of their purchases across a specified period, typically without incurring interest charges.
During the holiday season, BNPL plans were utilised by approximately 15.1m individuals in the UK, according to estimates from Citizens Advice.
These figures have meant that the availability of BNPL as a payment option has expanded, with major retailers like H&M and Argos now offering it at their online checkouts.
NatWest’s BNPL offering allowed users to repay their purchases in four equal monthly instalments without accruing any interest, and they could conveniently manage these plans through the NatWest mobile app.
Despite the success of the option across other brands, The Sun has claimed that traditional options like NatWest’s “instalment plan” for credit card users have retained greater popularity among customers compared to the BNPL offering.
One key distinction between the BNPL product and the existing instalment plans is that the traditional plans offer the flexibility to be activated for up to five eligible transactions, while BNPL automatically applies instalment plans to all purchases.
NatWest’s instalment plan for credit card users permits them to spread the repayment of specific purchases over instalments lasting three, six, 12, or 24 months.
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