The boss of buy now, pay later giant Klarna has said that people should “pay with the money they have” on most occasions, as the company launched an option for shoppers to pay up front.
The company said that UK customers will be able to pay their bills in full through its online system for the first time.
The buy now, pay later (BNPL) market has faced increasing criticism in the last year but has boomed, especially during lockdown.
It allows customers shopping online to delay payments. Proponents say the method has fewer charges than older methods, such as credit cards.
Opponents criticise the system for being bad at checking who can afford to pay off their debts.
On Monday, Klarna chief executive Sebastian Siemiatkowski unveiled the new “pay now” option, introducing a more traditional form of payment into his product.
“We firmly believe that most of the time, people should pay with the money they have, but there are certain times where credit makes sense,” he said.
“In those cases, our BNPL products offer a sustainable and no cost healthy form of credit – and a much-needed alternative to high-cost credit cards.
“The changes we are announcing today mean that consumers are fully in control of their payments whether they pay now or pay later.”
Klarna also said it plans to improve affordability checks, make its descriptions easier to understand, and remove all remaining late fees.
The pay now option has already existed for some time outside the UK, where the company said it has been popular.