Klarna rushes to self-regulate before regulation

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The Klarna logo is seen in an illustration taken January 6, 2020. REUTERS/Dado Ruvic/Illustration

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LONDON, Oct 18 (Reuters Breakingviews) - Klarna is trying to head off a crackdown by UK regulators. The Swedish buy-now-pay-later company said on Monday that it would add an option for British consumers to pay retailers in full at the checkouts on their websites. The $46 billion firm led by Sebastian Siemiatkowski will also make it clearer to consumers that buy-now-pay-later is basically credit, and strengthen its checks on whether users can meet their repayment instalments.

The cleanup comes just before the UK government sets out rules to police the sector read more . Siemiatkowski has long faced criticism that Klarna encourages customers to rack up debt. The concessions may be just enough to prevent more radical regulatory measures. However, the warnings could also discourage people from using Klarna’s buy-now-pay-later products. The sector’s rapid growth may be slowing down. (By Karen Kwok)

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Editing Ed Cropley and Oliver Taslic

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