Consumer finance company Zilch is catching heat for encouraging U.K. consumers to use buy now, pay later (BNPL) plans to buy cheap supermarket pizzas and other treats, the Financial Times (FT) reported Thursday (Jan. 20).
Users can download virtual Zilch cards to their phones and tap them at checkout. Zilch is accepted at thousands of U.K. retailers, including grocery stores, and allow users to pay for a fourth of their purchase upfront and spread the rest of the payments across six weeks, according to the report.
Critics say using BNPL for anything but larger purchases will increase personal debt for account holders, the report stated. Most BNPL companies offer no interest on the repayments.
A September blog post on Zilch’s website that has since been removed included “11 must-have shop now pay later items from Sainsbury’s,” including a 5 British pound ($6.82) PizzaExpress Margherita and Galaxy triple chocolate cake for 3 British pounds ($4.09), according to the report.
“At Zilch, you can have your cake and eat it too,” the blog post stated, per the report. “That’s why we offer you shop now, pay later not just at Sainsbury’s, allowing you to push the boundaries of your everyday existence, and get even closer to living your best life.”
Co-Founder of money-saving app Snoop Scott Mowbray, told FT that including grocery store pizza among must-have BNPL items “demonstrates one of my biggest issues with this form of payment — the way it is marketed and presented.
“They are preying on people’s fear of missing out, which could lead to a cycle of debt — and that’s all the more worrying at a time when living costs are set to soar,” he added, per the report.
Zilch allows users to pay at any merchant that accepts Mastercard. The company said earlier this month its digital card has reached more than 1.7 million customers in less than 15 months and it has reached a valuation of $2 billion, giving it unicorn status.
Read more: London BNPL FinTech Zilch Launches in Europe
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