Laybuy Global in the UK: A Retrospective Analysis of its Buy Now, Pay Later Model
Laybuy Global made a notable entry into the United Kingdom's digital lending landscape, establishing itself as a prominent Buy Now, Pay Later (BNPL) service. Founded in Auckland, New Zealand, in May 2017 by Alex and Gary Rohloff, the company quickly expanded its operations to the UK in late 2017. Its UK trading entities, including Laybuy Group Holdings Limited and Laybuy Holdings Limited, were registered in England and Wales, with a principal UK address located at 33 Foley Street, London, W1W 6. Prior to its group-level administration in June 2024, Laybuy was publicly listed on the ASX (ASX: LBY), with significant investors such as Eagers Automotive and various private equity backers. It is important to note that while the broader Laybuy group faced administration, the UK entities remained solvent but crucially suspended all new lending activities.
Laybuy’s core business model revolved around providing interest-free short-term credit. It allowed UK shoppers, aged eighteen and over with a valid UK billing address, to defer the full cost of their purchases by splitting them into manageable instalments. This model primarily targeted digital-native consumers, particularly those within the Gen Z and Millennial demographics, who frequently engage in e-commerce and sought greater flexibility in managing their budgets. The service was integrated into numerous online checkouts and offered limited in-store functionality. Key executives who oversaw the UK operations included Co-Founder Gary Rohloff as UK Managing Director and Dean Sequeira as Head of Data & Analytics, with John Gillan previously serving as the UK General Manager.
Understanding Laybuy's BNPL Product: Features, Fees, and Repayment Terms
Laybuy Global’s offering was straightforward and singular: a Buy Now, Pay Later product designed for short-term financing. Unlike traditional lenders, Laybuy did not provide personal loans or business loans. Its service enabled consumers to spread the cost of their purchases over six equal, weekly instalments, remaining entirely interest-free for up to twelve weeks, provided all payments were made on time. This structure was a cornerstone of its appeal, removing the burden of interest charges often associated with credit.
Regarding loan amounts, Laybuy typically offered a minimum credit limit of £60, with a maximum generally capped at £600. For certain users, a "Boost" feature allowed for occasional purchases slightly exceeding this limit, sometimes up to approximately £720, though this was always subject to additional assessment. The absence of interest meant the Annual Percentage Rate (APR) was effectively 0% if all scheduled payments were met promptly. However, Laybuy did impose a late payment fee of £6 for each missed instalment, with a maximum cap of £24 per single purchase. Repayments were managed through an automated debit system, drawing funds from a nominated debit or credit card on the chosen payment day, ensuring a streamlined process for users. Beyond the late payment charges, there were no origination or processing fees, reinforcing the "interest-free" promise for compliant users. Nevertheless, accounts with payments overdue by 42 days or more would be referred to debt collection agencies, and missed payments were reported to Experian, potentially impacting a borrower's credit score visible to other lenders. All credit extended by Laybuy was unsecured, meaning no collateral was required from the borrower.
Application Process, Technology, and User Experience
The application process for Laybuy was designed for convenience and speed, primarily through digital channels. Consumers could apply via the dedicated Laybuy mobile app, available on both iOS and Android platforms, or directly through integrated online checkouts on participating merchant websites. For in-store purchases, Laybuy offered limited options, typically through an SMS link or a virtual "Laybuy Card" that could be scanned at the point of sale. To ensure compliance and manage risk, Laybuy implemented Know Your Customer (KYC) procedures, requiring UK address verification, proof of identity, and conducting a credit check. A hard credit pull was performed on a user's first purchase, followed by softer checks for subsequent eligibility assessments, primarily leveraging Experian data.
Laybuy's underwriting methodology relied on automated affordability checks, also conducted via Experian, with credit limits between £60 and £600 determined by an internal risk scoring system. The "Boost" feature, allowing for higher value purchases, involved an additional layer of assessment. Once approved, the disbursement process was immediate, with Laybuy paying the retailer directly at checkout, while the customer then repaid Laybuy over time. Collections were automated through card debits, supported by app and SMS reminders. As noted, late fees were applied for missed payments, and accounts falling 42 days or more into arrears were escalated to debt collection agencies, with adverse payment histories reported to Experian.
The Laybuy mobile app generally received positive feedback, with a pre-administration rating of approximately 4.7 stars on UK app stores. Its features included comprehensive payment management, a directory of participating merchants, card management options, and the ability to schedule payments. The company also maintained a functional website, laybuy.com, which hosted merchant listings and a self-service portal. At its peak, Laybuy served around 300,000 active UK users, predominantly those aged 18-35. Despite positive app ratings, overall customer reviews on platforms like Trustpilot averaged 2.6 stars from over 10,000 reviews, with a significant number of one-star ratings citing issues such as app errors, account lockouts, slow customer support, and vulnerabilities to fraud. Merchant integration gaps and limited store coverage were also common complaints. Customer service was primarily email-based, with no direct phone line. Post-June 2024, UK administration enquiries were handled by FTI Consulting LLP. Despite the criticisms, some users appreciated the flexible budgeting and the option for early repayment.
Regulatory Landscape and Laybuy's Market Position in the UK
For much of its operational period in the UK, Laybuy operated in a largely unregulated environment under the Consumer Credit Act, as Buy Now, Pay Later services were not subject to the same strict oversight as traditional credit products. This situation is set to change, however, with the Financial Conduct Authority (FCA) introducing new BNPL regulations scheduled for implementation in December 2025. Despite the historical lack of formal regulation, Laybuy voluntarily adhered to certain FCA guidance, aiming for fairness in its terms, transparency with customers, and the responsible reporting of credit activity. Notably, from August 2022, Laybuy agreed to share payment histories with Experian, a move that brought greater transparency to its lending practices and allowed for a more comprehensive view of consumer creditworthiness by other lenders. No specific FCA enforcement actions were recorded against Laybuy's UK entities during its operational tenure.
Laybuy held a competitive position within the rapidly expanding UK BNPL market, typically ranking as the fourth largest provider behind major players such as Klarna, Clearpay (Afterpay), and PayPal Pay in 4. At its peak in 2022, Laybuy commanded approximately 5% of the UK BNPL market volume. However, this share saw a decline to less than 3% by mid-2024, partly due to increased sector consolidation and merchant exits. Its primary competitors included the aforementioned market leaders, alongside others like Zip. Laybuy sought to differentiate itself through several key features: its unique weekly instalment structure, contrasting with the fortnightly payments often offered by competitors; its policy of not charging merchant fees, which could be attractive to retailers; and its "Boost" feature, providing limited flexibility for purchases exceeding standard credit limits. Despite initial ambitions for growth, including a stated intention to enter EU and North American markets by late 2025, these plans did not materialise for its UK listing as its growth trajectory stalled, with its UK merchant count peaking at around 1,200 in 2023.
Practical Considerations for UK Borrowers Regarding Laybuy Global
For UK residents, the current status of Laybuy Global requires careful attention. As of June 2024, Laybuy's UK entities have ceased offering new lending services. This means that individuals cannot open new Laybuy accounts or make new purchases using the service. However, it is crucial to understand that any existing obligations remain. If you have an active Laybuy plan, you are still legally required to fulfil your repayment commitments according to the original terms and schedule. These payments will continue to be collected by the administrators or their appointed agents.
Individuals with existing Laybuy debts should continue to monitor their payment schedules and ensure sufficient funds are available in their nominated accounts to avoid late payment fees and negative impacts on their credit score. As missed payments were reported to Experian, defaulting on existing agreements could have lasting repercussions on your ability to secure credit elsewhere. If you face difficulties in making repayments, it is advisable to contact the administrators (FTI Consulting LLP) immediately to discuss potential options, rather than simply missing payments. For those considering Buy Now, Pay Later services in general, Laybuy's experience serves as a reminder to always thoroughly review the terms and conditions of any BNPL provider. While interest-free if paid on time, the imposition of late fees and the potential for credit score damage are significant considerations. Always assess your affordability before committing to any credit agreement, regardless of whether it is interest-bearing or interest-free, and remember that BNPL regulations are evolving, which may alter the landscape of consumer protection and reporting in the future.
