The Dutch Government aims to prevent BNPL in physical stores

Although an outright ban would be considered unfeasible because of EU regulations, the Dutch government believes that BNPL services can trigger earlier and larger debts, particularly among younger consumers. 

At the same time, according to Reuters, the government also urged Klarna to refrain from further expanding its BNPL services in physical stores in the region of the Netherlands.

More information on the government’s decision to prevent BNPL

Buy Now, Pay Later (BNPL) schemes surged in popularity for online purchases since the COVID-19 pandemic and were developed in order to allow consumers to split payments over time into smaller, interest-free installments. These loans are often provided by digital lenders such as Sweden's Klarna.

The Dutch government is seeking to prevent the rollout of the services in physical retail outlets in the region due to the multiple financial risks they pose for consumers. The government aims to protect and meet the needs of clients and users in an ever-evolving market, while also making sure that the regulatory requirements and laws of the industry are met. 

In addition, the Dutch government has held discussions with several other BNPL providers, including Zalando and Amazon. Unlike Klarna, these companies have not yet signed a code of conduct requiring them to verify the age of all customers and users.

The BNPL services have faced regulatory challenges in other countries as well. At the beginning of 2025, a research made by the Lending Standards Board (LSB) revealed that many consumers remain unaware of the true costs of Buy Now, Pay Later (BNPL) products, leading to financial vulnerability.

The study showed that only 52% of BNPL are aware of late payment fees, and just as many have an overall rough understanding of the costs. At the same time, alarmingly, 15% of clients have already incurred late fees, a figure that rises to 22% among those with poor credit scores.