NextGen Nordics: Managing innovation risk with regulation and education

finextra.com:

Eidsson, formerly analytics director at Klarna, spoke extensively to Milne about the challenges of regulating the BNPL space in order to protect the end consumer. When asked about the controls that have been brought in (or are currently being introduced) to the BNPL space by regulators, Eidsson commented that there is absolutely no reluctance toward new rules from the BNPL providers.

“I think any serious BNPL provider is going to welcome regulation […] Regulation for BNPL is only good, will strengthen the process for providers, will create trust for consumers in using a more regulated product, and will ultimately help the growth of this as a product.” The conversation continued to the subject of BNPL growth expanding “hand-in-hand with the growth of e-commerce,” explained Eidsson, as these solutions offer a much nicer way to check out than rummaging through your wallet at to pay in store. As the Covid-19 pandemic provided a long enough period for consumers to truly change their personal shopping habits, BNPL and other digital payments providers are all trying to remove as much friction as possible in order “to get to the nirvana of a one-click checkout model,” Eidsson furthered.

Milne countered that this objective is where a key part of the problem lies. By removing all of the friction or pain-points from the check-out experience, this arguably makes it easier and faster to make purchases, which may lead to vulnerable consumers spending at an unsustainable rate, damaging their financial health.

Milne posed Eidsson the question as to whether he sees BNPL products as potentially leading to significant financial distress for consumers down the line. “It depends,” he responded, “on what kind of BNPL product is being