Laybuy has launched an app-based initiative that will make its ‘buy now, pay later’ (BNPL) scheme available at hundreds of retailers, including travel companies.
The new affiliate programme lets brands sell through Laybuy’s BNPL app without having to integrate its scheme into their checkouts, which Laybuy hopes will drive more stores to its platform.
As part of the programme’s launch, the app has added 200 brands including Amazon, eBay, Asos, Nike, easyJet and Booking.com.
The move comes as competition between BNPL providers heats up. In June, Laybuy’s competitor Klarna made its pay-in-3 scheme available at all online retailers with the launch of its Shopping app. In that same month Laybuy introduced BNPL to UK in-store checkouts by releasing a new digital card.
Here, Which? explains what Laybuy’s new affiliate programme is and what you need to know in order to use BNPL safely.
Have you ever had an issue with a BNPL scheme? Tell us about it using our new BNPL complaints form.
How does Laybuy’s affiliate programme work?
First, you will need to sign up to Laybuy. After a soft credit check, you can download its app and search for retailers in its built-in shop directory. The retailer’s website then loads up within the app, allowing you to pay for items using Laybuy. There’s a hard credit check at the point of purchase.
With the new model, Laybuy takes a percentage fee of the cost of the item sold through the app, as opposed to charging the retailer for transactions when customers select its payment option at the online checkout.
It’s easier for brands to sign up to the affiliate programme because this saves them from integrating Laybuy’s payment option into their websites. Laybuy hopes to add 5,000 retailers over the next year.
While you might feel tempted to sign up, there are some things to bear in mind before you do.
1. Check your flights are covered
This is Laybuy’s first time working with the travel sector. EasyJet and Booking.com are available through the app, and Laybuy says hotels.com will be launching soon too.
As the pandemic has wreaked havoc with people’s holiday plans over the past 18 months, it’s always important to check whether your money is protected when booking a flight or hotel.
Laybuy isn’t regulated under the Consumer Credit Act, which means you won’t benefit from Section 75 protection if something goes wrong with the booking.
Also, Atol protection is not guaranteed through Laybuy, so you’ll need to see if the travel company has this in place.
- Find out more: which insurance companies have the best ‘Covid cover’?
2. Stay on top of repayments
Most BNPL schemes are interest-free, however, they tend to charge fees for late payments.
If you don’t make a repayment on time, Laybuy could charge you a £6 late fee. They may also arrange for a debt collection agency to collect the debt off you.
New research from charity Citizens Advice found one in 10 shoppers who use BNPL schemes have been chased by debt collectors.
Missed payments can be noted on your credit report and the mark could stay there for six years. If you think you might miss a BNPL instalment, contact the firm as soon as possible.
- Find out more: how to pay off BNPL debts
3. Keep track of spending
A BNPL app could push you to spend more than you otherwise would.
When we surveyed 2,000 members of the general public, a quarter (24%) of BNPL users told us they spent more than they planned to because BNPL was available at the checkout.
Since apps like Laybuy’s facilitate one-touch payments, overspending remains a risk when you pay in this way.
Used excessively, BNPL schemes could push you into debt. Citizens Advice warned in April that many BNPL were users struggling to pay for food and bills.
- Find out more: how BNPL firms encourage impulse buying