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Claro Encourages Consumers To Reduce Their Reliance on Buy Now Pay Later

The UK’s first financial coaching app, Claro Money, is encouraging the British public to reduce their reliance on Buy Now Pay Later (BNPL) schemes by launching a series of eye-catching billboards at key landmarks in the capital.

Claro Money is on a mission to help everyone develop a smart money mindset and a healthy relationship with money, so that they can achieve their goals. It has launched – “Bye Now Pay Later” – a series of digital billboards which feature statistics on the financial habits of society, at prominent sites in London, including Oxford Street, London Bridge, Canary Wharf and Westminster.

The digital financial coaching app’s campaign encourages the public 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.

The recent Woolard Review and subsequent Financial Conduct Authority (FCA) plans for regulation of BNPL schemes means changes will be made to the sector, however their rapid rise over the pandemic means that reforms will be too late for many.

The campaign features a series of hard-hitting statistics from Claro’s own research, published in its Mental Health Project report, created in partnership with Mental Health UK and The Money Charity, which found:

  • 41% 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,
  • 29% of 18 – 30-year-olds don’t use a budget to manage their income and expenditure.

Rob Brockington, CEO at Claro Money comments: “Unconsidered spending and an overreliance on unsecured financial products, such as Buy Now Pay Later 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’s “Bye Now Pay Later” digital billboards also hit the road, with an advertising van visiting the country’s most famous high street, highstreet Oxford Street, the ASOS head office, Boohoo London office, Klarna and ClearPay head offices.

Claro 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 financial coaching app believes that there is a place for BNPL products in the market, however it should be used occasionally, rather than relied on. Issues can begin if a regular habit of using these products is made. Better awareness and education are needed to prevent an overreliance on these facilities.

Dr Mark Fenton-O’Creevy, Professor of Organisational Behaviour at Open University Business School (OUBS), said: “Buy Now Pay Later 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.

“Firstly, some providers are knowingly encouraging impulsive buying behaviour, which our research shows significantly increases the chances of experiencing financial distress. The Woolard report highlights a correlation between those with pre-existing mental health concerns and the up-take of unsecured financial products such as BNPL. A combination of an increased chance of financial distress with pre-exposure to mental health challenges is surely an area that leads to significant concern for individuals and society.

“Secondly, it is far too common for BNPL providers to impose high-interest rates and excessive penalties (above traditional regulated financial credit) when consumers fail to meet payment deadlines. This relies on the well documented psychological tendency many consumers have to underestimate the difficulty of remembering or meeting payment schedules. As the Woolard report also highlights, BNPL are commonly targeting a younger audience and this may be seen to some as preying on the lack of experience or knowledge of financial products and the impact these can have on not only credit scores but mental wellbeing, if not carefully managed.

“It seems likely that in many cases, BNPL firms are profiting from offering low or interest-free credit headline offers carefully targeted at specific consumers not just by generating increased sales for retailers but also through penalty interest rates and additional charges. 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.”

Rachel Harte, Head of Financial Coaching at Claro Money, continued: “The rapid rise of BNPL providers and schemes must be met with an equally speedy increase in awareness of the dangers of its misuse. We want to instil better habits in people when using these schemes – there is nothing wrong in using BNPL if the debt is paid-off within the 30 days or soon after. However, the truth of the matter is for many, using BNPL schemes becomes a habit and the problem is exacerbated as more retailers provide the service at the point of purchase.”

The free to download app, which launched on 16 August, helps users to learn, plan, save and invest their money, and is already in high demand with over 20,000 users signed up to its waiting list. Claro is offering limited users a 2% cash bonus on their first £3,000, aimed to help people build an emergency fund.

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

Alex Ford, Claro Money’s CMO talked to our editor-in-chief Gina Clarke at Money2020 Europe in Amsterdam, he said “We’re looking to address the issue in the UK financial market that’s known as the advice gap. If you look at the ONS and the FCA reports around income and finances, around 23% of people are currently in debt, and struggle to save anything. Then at the other end of the spectrum, you’ve got people who use IFA’s and wealth managers who have upwards of £100,000 to play with. Then in the middle you have everyone else, about 35 million people, who are able to save some money every month, whether that’s £100 to £500. However they don’t have the huge numbers to be attractive to the traditional financial innovation space but would benefit from some kind of financial guidance and financial support, and that’s where Claro comes in. We built an app that allows people to book a real human and book a face to face call with a certified regulated financial coach.”

Through comprehensive in-app features, including one-to-one financial coaching sessions, spending analysis, and smart goal-setting, Claro Money combines technology with a human approach to provide users education, support, and tools to allow them to achieve their personal financial objectives.

The app also gives users access to saving and investing products that suit their needs, based on their timeline, risk level and values. 

“We have a whole learning hub where you can increase your financial education and increase your financial literacy for free, ” added Ford. “You can connect your bank account to open banking and use all of our budgeting tools for free. We are also committed to giving away 1000 free coaching calls, and though in the future that will be a chargeable subscription-based service now is a good time for early adopters to take advantage.”


  • Polly is a journalist, content creator and general opinion holder from North Wales. She has written for a number of publications, usually hovering around the topics of fintech, tech, lifestyle and body positivity.

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