View a one-page infographic summary of the analysis
Buy Now, Pay Later (BNPL) has enjoyed explosive growth in the UK during the pandemic and now, during the cost-of-living crisis, it has established itself as one of the most widely used forms of credit. Better-known providers like Klarna have been joined by innumerable others, including legacy banks like Santander and Natwest.
However, after analysing 933 articles published in UK media since the start of the year, we found that the industry has a growing PR problem – BNPL is continuously getting a lot of bad press. Recently, London-based fintech Zilch was criticised for advertising its virtual BNPL cards to pay for shopping at Sainsbury’s. Apple was slammed for making their Pay Later service too easily accessible to young people. And no sooner had Klarna and Deliveroo launched their “Eat Now, Pay Later” service than consumer advocates waded in to cause a furore.
So how can BNPL providers manage their negative image? Here are a few ways advanced media analytics can help:
1. Deep-dive into the criticism
Handling negative media coverage is not an easy task. A good starting point would be employing thematic and message analysis to delve into the media’s portrayal of BNPL, discerning the key issues and formulating informed strategies to address them.
Our analysis found that the main topic in the media debate around BNPL is Consumer vulnerability, as many outlets focused on how consumers, particularly those affected by the cost of living crisis, may find themselves at risk.
A closer message analysis showed us that the primary consumer vulnerabilities are the encouragement of overspending and the potential for accumulation of debt, with outlets highlighting how fintechs like Klarna, ClearPay, Zilch, Laybuy and DevideBuy tempt consumers into making impulsive purchases with their easy-to-use apps.
However, our analysis found that this surge in negative media coverage largely stems from the novelty of this industry and the lack of hard data, which has paved the way for myths and misconceptions. The claims of BNPL leading to ‘overspending’ or ‘debt spirals’ are catchy yet largely unsubstantiated narratives that have found footing amidst the informational void.
To mitigate this wave of misinformation, it’s imperative for BNPL providers to take a proactive stance through fact-based PR messaging. Key facts to be highlighted should include the successful repayment records of the majority of retail finance customers, the rigorous credit checks conducted for customer approval, and the mature debt recovery approaches employed by lenders, which aim at supporting customers facing repayment challenges through structured recovery plans.
2. Understand how to frame yourself as part of the regulation solution
Regulation surfaced as another significant topic, as a common media narrative is that BNPL is unregulated. In fact, popular UK consumer advocate Martin Lewis became the most influential voice in the conversation, as his assertion that BNPL regulation is imperative was echoed across numerous publications.
Lewis’s stance resonated with a broader call for action from debt charities Citizens Advice, MoneySavingExpert, MoneyHelper, StepChange, Money Advice Trust and Christians Against Poverty, which became some of the most influential organisations in the debate:
The regulation debate offers an interesting PR lesson – while almost all BNPL players have stayed under the radar on this issue, Klarna managed to become the only provider who secured positive media attention by criticising the delayed government action and proactively adopting self-regulation measures. It introduced a feature allowing consumers to deactivate its credit services and access support when grappling with indebtedness.
Klarna’s CEO, Sebastian Siemiatkowski also gained PR points as he urged traditional credit providers like Barclays and HSBC to emulate this initiative.
This proactive move, applauded even by some hardcore consumer advocates, highlighted the collaborative potential between industry and government stakeholders in forging consumer protection measures. A number of media outlets noted that this approach emphasised ‘pre-decisions’ in financial management, thus setting a commendable precedent in the BNPL sector.
3. Identify white spaces to take control of the narrative
Apart from deep-diving into the criticism and understanding how to frame yourself as part of the solution, advanced media analytics can help manage bad press through the use of white space mapping to identify untapped opportunities which brands can use to build a positive image.
For instance, our analysis pinpointed a conspicuous gap in the ongoing BNPL debate — responsible spending and financial literacy, an aspect largely overlooked by BNPL providers in their communications. While the conversation veers towards the perils of BNPL, there aren’t any discussions about how these solutions can become aids in making informed financial decisions, be it saving for a pension or deciding when to remortgage.
Another untapped opportunity is showcasing how BNPL can improve financial inclusion, as it can reach out to the underbanked, who typically have limited access to traditional financial services, by providing a more flexible and accessible alternative. These white spaces could serve as the cornerstone of effective PR campaigns which not only foster a more informed consumer base but also potentially mitigate the barrage of negative media coverage.