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H&M extends ‘Pay Later’ to UK app and stores, while study finds young shoppers becoming ‘credit averse’

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H&M is extending its Pay Later solution to UK customers, offering them what it sees as “a truly modern shopping experience that is both flexible and convenient no matter where and how they choose to shop.”

Together with Klarna, H&M has now introduced the new unique payment solution in the UK, enabling a frictionless and flexible checkout for customers across all channels. With Pay later, fashion fans who are members of H&M’s loyalty programme are offered the possibility to shop now and pay later both online and in stores using the H&M app.

Invoices are handled within the H&M app where customers can decide how and when they want to pay. 

“Shopping at H&M should be convenient, relevant and inspiring and we are happy to now offer fashion fans in the UK a whole new way of paying their fashion finds,” says Toni Galli, Country Manager for H&M UK & IE. “Through the partnership with Klarna, we have developed an H&M-unique payment solution that offers our fans a truly modern shopping experience no matter where and how they choose to shop.”

Michael Rouse, Chief Commercial Officer at Klarna, adds: “The foundation of the Klarna and H&M partnership is a commitment to continuously develop smarter, simpler and engaging shopping experiences. We at Klarna are excited to now launch our leading Pay later offering together in the UK, enabling a unique shopping experience for consumers – instore and online.”

H&M and Klarna plan to launch the new payment solution in a total of 8 markets during 2019 with more markets to follow in 2020. As part of the partnership, H&M and Klarna will continue to develop payment solutions to increase flexibility and convenience even further and make it even easier to shop at H&M, both in physical stores and online. 

The move comes as a YouGov study for Clearpay a distinct generational shift in UK spending habits. According to the study, young people in the UK are becoming increasingly ‘credit averse’. Instead, they are increasingly hungry for innovations which offer more convenience and avoid debt.

The research – called UK Millennials: shopping and money – reveals that young people are far less comfortable with debt than older generations, strongly prefer to pay by debit for almost every type of product and want more innovation in both shopping and financial services.

Millennials are the most valuable consumers, expected to represent 35% of the global workforce by 2020. YouGov notes there are currently 13 million UK millennials, representing a fifth of the population. According to the research, a third already use digital wallets, barely half even own a credit card, and of those without, 93% said they don’t even want one.

This is a profound generational shift in attitudes to debt which YouGov says may in part be explained by the rise in student debt. The report notes that since the UK government tripled the cost of further education in 2015, increasing numbers of young people have student loans. Among current and former students (aged 18-24) 76% have debt, against 56% of under 35s.

The research also found significant generational differences in how people choose to pay. Whilst YouGov found that people of all ages make similar use of debit cards and PayPal accounts, Milliennials are significantly less likely even to own a credit card than the 35-55s (Gen X) – at 51% against 71%.

“These findings support similar research we’ve done in the US and Australia where, if anything, young people are even less likely to own a credit card than in the UK,” says Carl Scheible, CEO of Clearpay. “The financial crash left scars on all generations and traditional banks and credit providers lost trust. In the UK young people in particular are looking for new ways to budget and make purchases without falling into debt.”

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