By Charlie Conchie
Billionaire Mike Ashley’s Frasers Group is finalising a move to roll out its own buy-now, pay-later (BNPL) scheme which will allow shoppers to borrow up to £2,000, according to reports.
The new payments product is set to form part of a range of new financial products rolled out by new chief Michael Murray under a scheme called Frasers Plus, the Telegraph reported.
Under the new offer, shoppers will reportedly be able to split and defer payments or take a loan through the group’s app that can be spent across its retailers, which include Sports Direct, House of Fraser, Jack Wills and Sofa.com.
Customers will be rewarded with points when shopping with the group’s new financial products. The group is reportedly hoping to replicate the triumph of Tesco’s Clubcard loyalty programme.
Ashley is “really excited about credit” and reckons the firm’s “bottom line could be boosted”, a source told the Telegraph.
Consumer loans will be facilitated through Studio Retail, a Financial Conduct Authority (FCA) regulated firm acquired out of bankruptcy by Frasers last year, whilst technology created by fintech startup Tymit, in which the retail group holds a 28 per cent stake, will facilitate the BNPL payments.
Murray is reportedly hoping Frasers Plus will have an edge on competitors due to the oversight of the FCA, setting it aside from unregulated products offered by firms like Klarna and Clearpay.
The sector is set to come under wider regulation this year after a report from former FCA interim chief Chris Woolard warned of the “urgent” need for oversight of the products two years ago.
Delays to the regulation of the sector have drawn the ire of the industry and debt campaigners. Tory peer and co-chair of the APPG for fintech Chris Holmes told City A.M. earlier this month that delays to tailored rules for the sector were hampering confidence of fintech firms for BNPL schemes.
Debt campaigners have also sounded the alarm over the products amid concerns that consumers are landing themselves in mounting piles of debt.
Frasers Group declined to comment.
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