Deliveroo, Klarna partner to offer Eat Now, Pay Later

As people across the globe experience the negative effects of a new economic recession with prices going up and record inflation rates, especially in Europe and in the US, companies are looking at alternative ways to stay in business and meet clients’ demands by providing flexible payment solutions.

The BNPL option on Deliveroo is currently available for the UK consumers, with the over 40% of the Brits who use BNPL payments missing at least one repayment in 2022, according to recent studies conducted by Credit Karma.

Why is BNPL still attractive?

 Several important retailers in the country, including Aldi, M&S, and The Range have already added installment payment options by partnering with Klarna and other similar fintechs. In some cases, BNPL providers even offer prepaid cards that are accepted at a wide range of merchants, both online and offline. 

With a current inflation rate of around 10%, UK consumers are feeling the chills of what is expected to be a hard winter, especially due to gas and energy prices spiking amid the Russia-Ukraine war. Adding two years of strict pandemic rules, repeated lockdowns, and an unemployment rate of over 4% between 2019 and 2021, it’s a no-brainer why companies providing installment payments have increased in popularity among the Brits. 

However, experts warn against the Eat Now, Pay Later option of Deliveroo, claiming it will only deepen the lack of financial education, creating a higher risk of overspending and missing payments. Some called for stronger regulation and protection for the UK customers, especially prior to the holiday season.

 

Food for thought – why do consumers need to Eat Now and Pay Later?

Deliveroo’s payment options via Klarna include paying for the entire order immediately, ‘Pay in 30’, where clients are expected to pay the full amount of their order in 30 days or the ‘Pay in 3’ choice of paying in three equal installments over 60 days, for minimum orders of GBP 30.

Although Klarna doesn’t charge interest or fees for delayed payments, the BNPL provider has been constantly criticised by financial experts for luring people into buying more than they can afford and creating debt.

At the same time, Deliveroo claims that its partnership with Klarna will create maximum flexibility, choice, and control, allowing customers to experience fine dining without the need to save money to pay upfront or enjoying takeaway food even when they’re low on funds.