Controversial buy now pay later firm Klarna has launched a contactless credit card that shoppers can use on the high street.
Online shoppers use this unregulated service for putting off or splitting down their payments into monthly instalments.
A credit card from the Swedish company allows customers to purchase without needing to make payments for another 30 days.
Critics are concerned that the move to the high streets will lead to shoppers spending far more than they have money for.
Klarna offers a contactless creditcard that customers can use in high streets.
Stella Creasy (Labour MP) said, “We don’t know which regulations will come in and the industry is growing at a rapid pace of knots.”
“We have seen many people who buy these products end up paying more than they can afford.
“It is very worrying to know that the cost of living crisis will affect so many families.
Financial Conduct Authority was a watchdog for the city that stated a year ago that regulation of the financial sector was urgently needed.
This month, the Government closed consultation. Consumer protection laws are not likely to come into force until summer.
Klarna Cards are available in pink and black, and can be used in all stores that accept Visa. Over 400,000 people have applied in advance for the Klarna Card.
Online shoppers use this unregulated lending facility to defer payments, or divide them into monthly instalments. (Stock image)
According to the lender, credit checks will be conducted before any application is accepted.
Failure to repay their debts in time will result in no interest and no late fees. Unpaid debts can be transferred to collection agencies.
Credit Karma’s research found that half of buyers who buy now and pay later viewed it as “easy credit”.
Alex Marsh, head of Klarna UK, said: ‘Last year consumers saved over £100million in interest by using buy now pay later instead of high-cost credit cards. Klarna calls for regulation since over a decade.