According to recent reports, Frasers Group is planning to introduce its own buy-now-pay-later (BNPL) app called Frasers Plus. This strategic move is expected to enhance the company’s earnings while distinguishing it from competitors, as the app will be regulated by the Financial Conduct Authority (FCA). Although Frasers Group has not yet provided a comment on this development, it is clear that they envision significant benefits from this new venture.

The Frasers Plus BNPL scheme will enable customers to borrow amounts up to £2,000 and divide their payments or take out a loan through the group’s dedicated app. This loan can be utilized at any of the retail brands within the Frasers Group portfolio, including Flannels, Sports Direct, House of Fraser, and Jack Wills.

The payment plans for Frasers Plus will initially begin at three months, with purchases divided into three interest-free installments. However, customers will also have the option to select longer periods of six, 12, 24, or 36 months. It is important to note that these longer periods will include interest charges at a rate of 29.9% APR.

In addition to the convenience of BNPL, customers using Frasers Group’s financial products will be rewarded with loyalty points for every £1 spent. This loyalty program aims to replicate the success of other well-established schemes such as Tesco’s Clubcard.

To facilitate the BNPL payments, Frasers Group will leverage the technology developed by Tymit, a fintech startup in which the company holds a 28% stake. Interestingly, consumer loans will be activated through Studio Retail, a firm regulated by the FCA that Frasers Group acquired last year after it declared bankruptcy.

CEO Michael Murray is highly optimistic about the prospects of Frasers Plus, especially because it will benefit from being regulated by the FCA. This regulatory oversight sets it apart from unregulated products offered by competitors such as Klarna and Clearpay. Moreover, the BNPL sector as a whole is expected to undergo more comprehensive regulation later this year.

Overall, the launch of Frasers Plus underscores Frasers Group’s commitment to providing innovative financial solutions to its customers. This strategic move not only has the potential to increase the company’s earnings, but it also positions Frasers Group as a leader within the rapidly expanding BNPL market. By operating under the scrutiny of the FCA, Frasers Group aims to ensure the highest level of transparency and customer protection in its financial offerings.

Useful links:
1. Financial Conduct Authority (FCA)
2. Frasers Group