The main players

Online shoppers are increasingly turning to interest-free buy now, pay later (BNPL) services at the checkout. We take a look at some of the most popular names:

Klarna

The largest of the providers, Klarna is best known for hiring celebrities such as Snoop Dog and Madonna to advertise its services. The Swedish firm became one of the world’s most valuable fintech companies, second only to Stripe, after it was valued at nearly $46bn (£33bn) earlier this year.

Laybuy

The New Zealand-based firm was launched in 2017 but has grown rapidly across the UK and Australia. Purchases are usually spread across six weekly instalments, and this can also apply to items bought in store at partner retailers. Laybuy runs hard credit checks on customers and says it rejects a quarter of all the people who apply.

Clearpay

This Australian company launched in 2014, and entered the UK two years ago. Known as Afterpay in some countries, it allows customers to pay in four instalments two weeks apart. Clearpay currently only operates online but is hoping to launch in bricks-and-mortar stores by early 2022. It was acquired by San Francisco-based Square in August in a $49bn all-stock deal.

Paypal

The American payments giant allows UK shoppers to split their payments into three monthly instalments at the checkout. It announced in August that it was scrapping late fees for missed payments on all BNPL products globally, which suggests that shoppers had been put off by providers who charged.