Brits urged to axe BNPL in push for money planning app

British consumers are being encouraged to ditch their reliance on buy now pay later (BNPL) schemes – which have seen huge take-up by retailers desperate to get customers in – in a new campaign to promote what is claimed to be the UK’s first financial coaching app.

Claro Money, which launched publicly in August to a waiting list of over 25,000 customers, aims to provide users with the education, support and tools to allow them to achieve their personal financial goals.

Inside the app, users can speak to a real financial coach, view their spending across multiple accounts, create goals, as well as choose saving and investment products based on their timeline, risk levels and values.

The new campaign, under the strapline “Bye Now Pay Later”, comprises a series of digital billboards that feature stark statistics on the financial habits of consumers from Claro Money’s own research, published in its Mental Health Project report, created in partnership with Mental Health UK and The Money Charity.

These include, the fact that 41% of consumers have been living beyond their means at some point over the last 12 months; 20% of households couldn’t last a month if they lost their main source of income, without needing to borrow money; and 29% of 18- to 30-year-olds don’t use a budget to manage their income and expenditure.

The campaign is running at prominent OOH sites in London, including Oxford Street, London Bridge, Canary Wharf and Westminster, with an advertising van visiting the offices of leading BNPL firms Klarna and ClearPay, as well as retailers ASOS and Boohoo.

The activity will be supported by a paid social campaign, targeting users in the locations that the OOH activity is running. Billboard design was handled by Claro Money’s in-house team, with planning, placement and PR for the campaign overseen by agency One.

As part of the initiative, consumers are being encouraged to claim one of 1,000 free one-to-one personal finance coaching calls, where they can get help creating a financial plan and building sustainable financial habits, in an effort to drive lasting change in the way society manages money.

Claro Money chief executive Rob Brockington said: “Unconsidered spending and an overreliance on unsecured financial products, such as BNPL schemes, can ruin people’s personal finances for years. We want to reduce this reliance, and remind consumers that they have a choice in how they save, spend and invest their money.

“Our ‘Bye Now Pay Later’ campaign is aiming to raise awareness of the benefits of better money management for everyone, regardless of their income, bank balance and social standing.”

Claro Money is also inviting BNPL providers and retailers to a meeting to explore ways of promoting considered spending among the public, and educating people on unsecured credit products.

The company believes that there is a place for BNPL products in the market, however they should be used occasionally, rather than relied on. Issues can begin if a regular habit of using these products is made, the firm argues, with better awareness and education needed to prevent an overreliance on these facilities.

Dr Mark Fenton-O’Creevy, Professor of Organisational Behaviour at Open University Business School, said: “BNPL products, especially when accompanied by an ‘interest-free’ headline offer, can be particularly appealing to cash-strapped consumers.

“Some BNPL offers are in good faith, with the win-win aim of allowing customers to spread payments affordably whilst increasing sales. However, others amount to worryingly ethically questionable practices.

“If consumers predominantly used the headline advertised interest free options, the BNPL would most likely not generate comparable profits and this demonstrates the commercial reliance on exploiting known psychological traits of targeted sections of our society.”

Claro Money insists its app has been developed to directly support users to build an achievable yet effective financial plan, regardless of their income or financial stage.