The buy now pay later market has exploded in recent years and now a New Zealand company is trying to make its mark in the UK. 

Laybuy was set up by Gary Rohloff, his wife and his two sons in 2018 and launched in the UK in early 2019. The likes of Klarna and Clearpay have paved the way for more buy now pay later (BNPL) firms to move into the UK, where the market is fairly young. 

Since the expansion, Laybuy has struck an exclusive deal with leading football teams Manchester United, Manchester City and Arsenal, placing them firmly on the map. 

Read more: A defence of buy now, pay later: a new retail landscape needs new payment systems

Its annual results published today show total gross merchandise value increased 159 per cent year-on-year to NZ$589m. It forecasts it will be on track to exceed NZ$1bn by 2022. 

It posted a $41.3m annual loss but Rohloff attributed this largely to the costs associated with its Australian IPO last autumn. 

Unsurprisingly with the growth in online shopping, Laybuy enjoyed 500 per cent growth between 2020 and 2021 and has invested heavily in its products: “We’re getting the benefits of scale, it’s just a function of being a hyper growth company” Rohloff tells City A.M. 

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Now Laybuy is ready to grow further in the UK: “The UK now dominates our business. We have somewhere around 2000 merchants in the UK who serve on our platform,” Rohloff says. 

It’s a bold claim in such a saturated market with established players. The UK’s BNPL sector trebled in 2020 to £2.7bn and is worth one per cent of the credit market. 

“We’re used to being the David versus the Goliath” 

Rohloff admits he’s relatively used to being the underdog but is complimentary about his peers. “In New Zealand we come from a population of just 5m people, we’re kind of used to being the David versus the Goliath,” he says.

“I have the greatest respect for [Klarna and Clearpay], they’ve been around an awful lot longer than us. For us to go toe-to-toe with those exceptional companies I think is a credit to our team. The reality is we offer a very different solution to consumers”. 

He is at pains to explain that Laybuy really is different from other BNPL companies and emphasises how responsible the four-year old company is. 

Read more: Klarna to buck pandemic trend and take on more UK office space

“Our backbone, our values, our philosophy is all around being a responsible credit provider, and we have had credit and affordability checks since the day we started the business.” 

“We don’t want our sons who founded our business with us in an unsustainable debt position, and we will never do that to our customers,” he added. 

This comes just a day after the Advertising Standards Authority (ASA) gave them a slap on the wrist for claiming that carrying out a credit check would not affect a borrowers’ credit score. 

Read more: Woolard review: FCA cracks down on £2.7bn buy-now-pay-later market

“We’re not Wonga” 

Despite saying he respects and likes the competition he does take aim at other BNPL firms: “I think that is quite a clear differentiator for us in every market in which we operate and we will continue to go down that road.” 

He’s at pains to explain Laybuy is not like all the other BNPL companies. He gets frustrated being tarnished by the comparisons to payday lenders like Wonga. 

Campaigners have called for tighter rules in the sector amid concerns it would leave vulnerable customers in debt and encourage people to live beyond their means. 

Read more: Advertising watchdog bans Klarna Instagram ads

As part of this ‘responsible’ approach, Rohloff took an active role in the Woolard review, which was published in February, which set out a set of recommendations to regulate the market. 

Under the plans, providers will be subject to FCA rules so will need to undertake affordability checks before lending and ensure customers are treated fairly, particularly those who are vulnerable or struggling with repayments.

“We are very supportive of what those recommendations suggest because it talks to the values of our company around being responsible,” Rohloff says. “Regulation is okay so long as it’s appropriate for the service being offered, because if it’s overly heavy handed then the person that suffers is the consumer because access to interest free credit is harder.”