Called Newpay, the service is much like buy now, pay later in that it’s integrated into a retailer’s checkout with fixed 6-, 12-, 18-, or 24-month payment options. However, unlike BNPL, Newpay also includes a quick affordability check of customers, along with a fixed credit limit of up to GBP 5,000 across the retailers they shop with.
NewDay, which also launched the Bip digital credit card earlier in 2021, is positioning Newpay as a safer alternative to buy now, pay later given it is regulated by the Financial Conduct Authority. While Newpay will be interest-free at selected retailers, by default customers will be charged a standard interest rate on the credit they use, typically at 21.9% APR.
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