Buy now pay later provider Zilch to launch physical card
Buy Now Pay Later (BNPL) lets shoppers delay paying in full, instead breaking up costs over several weeks or months.
Providers have come under new standards since legislation was introduced last month.
It came amid concerns that a lack of regulation has led some of the 10 million people who use it to take on too much debt.
What is Zilch?
Zilch, which has been named one of the fastest-growing in the UK, said it means more of its customers can make payments in stores.
Zilch currently offers a virtual card, stored in its app or in people's mobile wallets, which links to customers' debit cards and means they can pay for shopping flexibly.
Which retailers work with Zilch?
A well as Amazon and Iceland, retailers from Primark and ASOS to Just Eat and eBay use it, and people can choose to pay in full, or spread payments over six weeks or three months.
While the virtual card can be used in shops as well as online, Zilch said that nearly 80% of UK adults do not regularly use mobile wallets, so having a physical card will drive more transactions.
It is also set to open up buy-now-pay-later options for bigger purchases like home repairs, hotel check-ins, and car rentals.
When will Zilch cards be available?
The cards will become available to its existing customers from September.
The London-based company has grown its customer base to more than five million since launching five years ago and securing authorisation from the UK's Financial Conduct Authority.
It reached a valuation of two billion dollars (£1.5 billion) in 2021 and was named one of the UK's fastest-growing fintech unicorns this year (a start-up company that has reached the level of $1 billion in funding).
Recommended reading:
What is the issue with buy now pay later?
But, there are issues with all buy now pay later products, so it pays to be careful, as Aaron Peake, Personal Finance Expert at CredAbility, warns: 'While BNPL can be interest-free, it isn't risk-free.
"What's worrying is how quietly it can cause damage, with many people not realising it's real debt until it's too late.
"A few small missed payments can knock your credit score or trigger late fees, and in some cases, debt collectors get involved straight away.
"What's worse, this could block your chances of getting a mortgage or even a decent phone contract."
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