KLARNA, Britain’s biggest “buy now, pay later” firm, says it has saved customers nearly half a billion pounds in interest since its UK launch in 2014.
Around 10million — more than a third of households — have used Klarna to buy goods in the past year.
Roughly 10million shoppers have used Klarna to buy goods in the past year[/caption]
Tulip Siddiq, economic secretary to the Treasury, confirmed rules would come in next year to legislate the ‘buy now, pay later’ sector[/caption]
And the boom in “buy now, pay later” has prompted the Government to say it will legislate the sector to protect shoppers.
Last week Tulip Siddiq, economic secretary to the Treasury, confirmed rules would come in next year.
And Klarna co-founder and CEO Sebastian Siemiatkowski welcomed the move.
He said: “We are in favour of regulation — I’m not an anarchist that doesn’t believe in rules.
“The main thing I’m worried about is if it will reduce competition against the banks who are raking in profits from customers.”
Klarna said that during its decade in the UK, the banks and traditional credit card firms such as American Express have made £160billion from customer interest charges.
The Swedish firm, co-founded by Mr Siemiatkowski in 2005, lets customers buy goods and split payments over three months without interest.
It made almost £1billion in revenues in the first half of this year from ads and charging retailers commission.
Klarna charges people who miss a payment a maximum £5 late fee.
However, it says its default rates are 30 per cent lower than traditional lenders’.
Mr Siemiatkowski, who started his working life flipping burgers at Burger King, told Sun Business: “We’ve saved consumers nearly half a billion pounds in interest — that’s real money in their pockets, not lining the banks’ coffers.
“We’ve proven that paying for everything — from flights to garden tools and getting your boiler fixed — doesn’t have to mean being gouged by high interest rates.”
Debt charities have argued that Klarna encourages people to buy things they can’t afford.
But Mr Siemiatkowski said: “Having fixed payment instalments without interest is a lot better than racking up credit card debt.”
HSBC to be split in two
HSBC has announced a big shake-up that will split its UK and Hong Kong business into separate divisions.
The overhaul comes six weeks after Georges Elhedery, the bank’s former finance chief, was promoted to the top job.
HSBC also named Pam Kaur as its first female finance chief as part of its restructuring.
The bank said the overhaul is along geographic lines of “Eastern” markets and “Western”, which will include UK high street branches.
HSBC, founded in Hong Kong in 1865, has been in the middle of rising geopolitical and trade tensions between Beijing and the US and UK.
Its biggest investor, Chinese insurer Ping An, had tried unsuccessfully to agitate for a break-up of the company last year.
Mr Elhedery, who replaced Noel Quinn, said the revamp will result in “a simpler, more dynamic and agile organisation”.
Big buys ‘delayed’
CONSUMERS are still nervous about making big purchases, figures from DIY retailer Wickes and Halfords show.
Wickes yesterday reported that sales of its bathroom and kitchens had fallen by 13 per cent in the last quarter as customers put off big projects.
Meanwhile, car parts to bikes retailer Halfords reported a 0.1 per cent slip in sales.
Boss Graham Stapleton said shoppers’ confidence was dented “by uncertainty around the contents of the Budget”.
Don’t let red tape ruin AI
ARTIFICIAL intelligence is not some sci-fi fantasy — it is here already.
In San Francisco today you can take a ride with a Waymo self-driving car.
At KLARNA, we have seen how our AI customer service agents help to resolve problems in just two minutes, compared to 12 minutes before.
Our lives and the way we work are already changing and it will affect jobs at an accelerating pace.
Governments need to stop dragging their feet.
While we need smart regulations to keep AI in check, we can’t afford to strangle it with red tape.
The looming threat is that if our governments dither too much we will fall behind less democratic countries who do not share our values.
The answer has to be to promote progress while also offering an answer to those people impacted by the changes.
AI is already shaking up the job market — and we’ve already paused hiring more staff because of AI efficiencies.
Some jobs will change, new roles will emerge and some will disappear. Some firms talk about retraining and upskilling but can we really expect a 55-year-old translator to magically become a TikTok star or influencer?
That’s why governments need to wake up and step up.
While AI is driving progress, they must ensure that it benefits society as a whole, not just a select few.
Mulberry hush
MULBERRY has branded Mike Ashley’s £111million takeover “untenable”, as it swatted away a sweetened approach.
Mr Ashley’s Frasers Group already owns 37 per cent of the luxury handbag maker.
However, its second attempt to grab the business stalled after Mulberry’s biggest investor rejected it.
Challice — controlled by Singaporean billionaire Christina Ong and her husband — own a majority 56 per cent stake and can block any deal.
Shares fell by almost 10 per cent, valuing it at £81million.
Failure of duty
THE VIRGIN WINES boss has attacked government plans to hike alcohol duty as “ill-thought through and amateurishly executed policies”.
Jay Wright, chief exec of the online wine seller, said the drinks industry had been “battered beyond belief” in recent years by people with “no understanding of the effects”.
Another duty hike is feared in next week’s Budget.
Mr Wright still toasted £1.7million of profits, after a loss of £700,000 in the year to the end of June.
A cost-cutting drive saved £1.4million.
THE new Minister for Investment, Poppy Gustafsson, is launching a scheme to attract more funding into women’s sport.
She will say today that women’s sport, including football, rugby, tennis and netball, could be worth over £1billion this year alone.
