Amazon teams up with Barclays to launch ‘buy now, pay later’ service

Shoppers will now be able to apply for a reusable credit account from Barclays, allowing them to spread the cost of purchases on Amazon’s UK site in equal monthly instalments between three and 48 months.

The new Instalments service will be available to finance purchases of £100 or more and can be used across millions of products on the site.

Amazon and Barclays first launched Instalments in Germany last year but the introduction of the service marks Amazon’s first step into the busy ‘buy now, pay later’ (BNPL) market in the UK.

According to the BBC, more than 17 million shoppers have already used BNPL services across the UK. 

Unlike other providers, such as Klarna, Barclays will charge customers an annual interest rate of 10.9%.

Amazon UK head of instalment payment products Rob Levy said: “Every day we strive to innovate on behalf of our UK customers. Instalments is one way we will offer customers flexible options, enabling them to choose to pay now or split the cost of larger purchases into budget-friendly monthly instalments.”

Head of Barclays Cubed and consumer bank Europe Ruchir Rodrigues added: “This is another major step in our ambition to reinvent payments at the point-of-sale and delight customers. 

“Amazon offers a world-class shopping experience, and this new service gives users a fully reusable payment-by-instalments option, which they can use to spread the cost of purchases over a longer period.”

Earlier this year, the UK government pledged to regulate BNPL lenders after an independent review warned that the sector represented a “significant potential consumer harm”.

Companies such as Klarna, Laybuy and Clearpay do not charge interest to users but borrowers who do not meet monthly repayments can be charged late payment fees and be pursued by debt collectors.

• Don’t miss the best of the week – sign up to receive the Editor’s Choice every Friday