Heavy-handed regulation of Buy Now Pay Later services would be a mistake, says IEA expert
Victoria Hewson, Head of Regulatory Affairs at the free market think tank the Institute of Economic Affairs, responded to Financial Conduct Authority (FCA) review recommending regulation of Buy Now Pay Later services, such as Klarna
“While the removal of regulatory barriers that deter the provision of credit in ‘non-prime’ markets by mainstream lenders is a welcome recommendation, extending new barriers to Buy Now Pay Later providers threatens competition and innovation, and could deprive consumers and merchants of this useful service altogether.
“The FCA has been criticised in the past for lacking a good evidence base for its measures to prevent mis-selling of financial products. An outcomes based approach as recommended in the report could help counter this, if well-directed.
“There is also the risk that heavy-handed regulation could leave only the relatively affluent able to readily access lawful credit.”
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