British digital bank Zopa has announced that it has forayed into the UK’s £6bn buy-now-pay-later (BNPL) space joining others such as Apple, PayPal and Klarna.
Zopa plans to offer fully regulated products with “transparency” and “customer protection” as a priority, the lender said in a LinkedIn post.
The digital bank will launch its new offering, which was first announced at Money2020 Europe, with the finance ministry’s ongoing consultation in mind.
Currently, the BNPL space is unregulated in the UK.
Zopa said its BNPL offering will focus on offering credit between £250 and £30,000 and help customers build their credit profiles.
It will work with credit rating agencies and lend only after conducting credit checks and affordability tests, the bank noted.
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Zopa chief commercial officer Tim Waterman said: “Against a backdrop of global financial uncertainty Zopa is entering the buy-now-pay-later space to make instant, yet responsible lending decisions with products that are sustainable and fit for purpose.
“Zopa is ushering in the era of BNPL 2.0, an evolution of BNPL that is regulated. We combine the seamless customer journeys and best-in-class digital UX offered by traditional BNPL players alongside the ability to underwrite longer, larger loans in a way that fully meets regulatory requirements.”
In December last year, Zopa decided to close its peer-to-peer (P2P) lending platform to focus on banking operations.
The announcement followed its £220m funding round, which was joined by the likes of Softbank Vision Fund 2, Silverstripe, Northzone and Augmentum.