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BNPL providers lose millions in 2021

Tuesday 1 March 2022 11:13 CET | News

The Buy Now, Pay Later providers have taken a beating on the stock market with shares plunging on average 80%, with the sector losing millions and a reported dive in consumer interest in the product.

Losses at Klarna soared in 2021, as the company’s rapid growth into new markets drove up credit defaults. The fintech reported net losses of USD 470 million for the fourth quarter of 2021.

Afterpay also reported a USD 156.3 million loss for the 2021 financial year, which was up by almost 700% compared to 2020. Zip also reported a USD 652 million loss, a 3000% increase on 2021, where it had announced a USD 20 million deficit.

It comes as consumer groups warned that BNPL services could contribute to a ‘debt spiral’ for people already struggling, with calls for the industry to be more tightly regulated like other financial products such as credit cards.


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Keywords: Klarna, Afterpay, BNPL, financial services, regulation
Categories: Payments & Commerce
Companies:
Countries: World
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