‘How dare they?’: Klarna chief hits back at critics of Deliveroo deal
The UK chief of buy-now pay-later giant Klarna has mounted a defence of its tie-up with Deliveroo today after claims from debt campaigners that the deal will plunge struggling Brits into debt.
The Swedish BNPL leader struck an agreement with Deliveroo last week to allow customers to spread the cost of a takeaways across instalments, but the move has drawn backlash from campaigners who say it will land more people in debt as the cost of living rises.
Alex Marsh, UK chief of the payments firm, has today defended the move however and said it poses less of a threat than credit cards.
“Critics argue that it is ‘inappropriate’ to pay for food or in this case a takeaway on BNPL. That if you can’t afford to pay for it outright, you should settle for a baked potato and get back in your box. How dare they?” he said in comments shared with Morning Wire
“If you’re on a tight budget and decide to put on a treat for the family, why should your only option be a high interest credit card?”
He added that “most people, most of the time” know how to spend their monthly budget wisely, and with guardrails in place there is less of a threat than traditional credit providers.
Campaigners have sounded the alarm over the deal due to the unregulated nature of BNPL products, which they say offer shoppers no official route to recover cash and may lead to vulnerable shoppers taking on unaffordable debt.
Sue Anderson, head of media at Stepchange described Klarna’s deal with Deliveroo last week as “a worrying development” at a time of “such financial uncertainty for households.”
Labour MP Stella Creasy also traded barbs with Klarna’s founder and CEO Sebastian Siemiatkowski this morning over the safety of the products, which she said encouraged consumers to buy more products than they can afford.
“You market your product to retailers in this country telling them that people will spend 30 to 40 per cent more […] if they use BNPL, because people are spreading the cost,” she said to the Klarna chief in a debate on Rip Off Britain.
Creasy, a long-time critic of BNPL firms, argued that an expensive pair of trainers is made to “look like it’s less expensive than it is” and tempt customers in.
The firms are set to fall under the remit of regulators next year after the Treasury announced plans in June to bring them within the purview of the Financial Ombudsman Service, as well as tighten affordability checks on consumers.