Revolut has finally joined the ‘buy now, pay later’ (BNPL) bandwagon and is now rolling-out the service in Europe, starting with Ireland.

Multiple media reports have confirmed that Revolut is launching its BNPL product Pay Later in Ireland today (24 June) to compete with established players in the space such as Swedish fintech Klarna, which launched in Ireland last November.

Pay Later will allow users of the Revolut app in Ireland to spread the cost of online and in-store purchases up to €499 across three instalments. A fee of 1.65pc per purchase will then be charged and repaid as part of the final two instalments.

“Revolut Pay Later gives our customers more control and flexibility over their personal finances, in a responsible way, by enabling them to spread the cost of purchases over three instalments,” said Revolut Europe chief executive Joe Heneghan, as reported by the Irish Times.

“This encourages people to pay within two months, rather than calling on overdrafts and credit cards which don’t carry the same emphasis on quickly paying back the amount borrowed.”

Buy now, pay later has seen great interest from start-ups and established financial companies alike, such as UK fintechs Zilch and Monzo, US-based Square (which acquired Afterpay), Italy’s Scalapay, Mastercard, PayPal (which acquired Japan’s Paidy) and even Apple.

But with interest rates on the rise amid an impend economic downturn, it remains to be seen if the BNPL space can hold on to its current moment. Here’s a quick look at some of the other players Revolut will have to compete with in Europe.

Klarna

This Swedish fintech made ripples in the tech world last year after it raised $1bn in funding that valued the BNPL start-up at $31bn, becoming Europe’s most valuable privately-held fintech company.

Based in Stockholm, Klarna surfed on a wave of interest among online shoppers in the ability to spread payments out in instalments when purchasing products. While definitely the biggest player in Europe, it competes with US rivals such as Affirm, which floated on Nasdaq last year.

When it launched in Ireland last November, Klarna co-founder and CEO Sebastian Siemiatkowski said the Irish market was “really exciting” because of the popularity of debit cards in the country. “As the older-style financial institutions exit the market, we’re here to create more competition, which is in the best interest of the consumer,” he said.

Last month, however, Klarna announced plans to lay off 10pc of its workforce “across all domains” of the company because of headwinds arising from increased inflation, a volatile stock market and the war in Ukraine.

Apple

Earlier this month, Apple revealed at its developer conference that it was also diving into the BNPL space with its own offering – further stiffening competition.

Apple Pay Later lets customers split a purchase, online or otherwise, into four equal payments over six weeks, with no interest or fees to pay. The service, based on Mastercard, is built into the Wallet app and can be used when making payments through Apple Pay.

While not available in Ireland yet, the Irish Times reported that Apple Pay Later will be available to “qualifying applicants” in the US when the next version of the iPhone’s operating system, iOS 16, launches this year.

What’s unique about Apple’s play for the BNPL space is that all financing for loans will come internally thorough a wholly-owned subsidiary – which may not be hard for the world’s only company to cross $3trn in value.

Mastercard, Playter and Monzo

Mastercard also made a play for the crowded BNPL space last September, when it launched the Instalments service for its customers in the US, UK and Australia. The move enables banks, lenders, fintechs and wallets to offer flexible instalment options to consumers.

“At the heart of it, payments come down to choice – and people want more from their money with greater flexibility and control in how they pay and where they shop,” Mastercard’s product chief Craig Vosburg said at the time.

Meanwhile, a London-based fintech called Playter that helps small and medium-sized business scale with BNPL just announced the closing of a whopping $55m round earlier this week. Led by the same investors who backed Klarna, the investment follows a $1.7m funding round in March.

And finally, another UK fintech fuelling competition in Europe’s BNPL space is Revolut rival Monzo, which launched its own buy now, pay later service last September.

Monzo Flex allows users to spread the cost of their purchases over three months interest-free. It also offers a six-month and 12-month option at a 19pc interest rate.

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