Buy now, pay later company Klarna plans to return to profitability by summer 2023.
Jakub Bolzycki | Noor Photos | Getty Images
Swedish company Klarna partners with Dutch payments fintech Adien Bringing its popular “buy now, pay later” service to brick-and-mortar retail stores.
The company said on Thursday it had reached an agreement with Adyen to make its payment products available as an option at physical payment machines used by the Amsterdam-based fintech business partner.
The companies said that after the deal is completed, Klarna will be an option for more than 450,000 Adyen payment terminals in physical stores. The partnership will initially launch in Europe, North America and Australia, with plans to roll out more broadly later.
Klarna’s Buy Now Pay Later (BNPL) service allows users to spread the cost of a purchase over a period of interest-free installments. According to Klarna, the service is mainly related to online shopping, which currently accounts for about 5% of the global e-commerce market.
With Klarna and other companies in the sector such as cloggedIt owns Afterpay, Affirm, Zip, Sezzle and Zilch as it seeks to expand its reach.
The move extends Klarna’s previous arrangement with Adyen for e-commerce payments.
“We want consumers to be able to pay with Klarna at any checkout, anywhere,” Klarna chief commercial officer David Sykes said in a statement on Thursday.
“Our strong partnership with Adyen is a huge boost to our ambition to bring flexible payments to the high street in new ways.”
Alexa von Bismarck, Adyen’s head of Europe, Middle East and Africa, said the deal was about giving consumers more flexibility at checkout, adding, “Consumers are very concerned about in-store touchpoints and value the ability to check out the items they want. The brand you want to pay for.
Earlier this year, Klarna sold Klarna Checkout, the company’s online checkout solution for merchants. This puts the company in less direct competition with payment gateways such as Adyen, Stripe and Checkout.com.
Klarna’s deal with Adyen comes as the Swedish tech giant explores a highly anticipated initial public offering.
Klarna has not yet set a firm timetable for when it expects to go public, but CEO Sebastian Siemiatkowski said told CNBC earlier this year An IPO for the company in 2024 is not “impossible.”
In August, Klarna begins Launch a checking account-like productcalled Klarna Balance, and cashback rewards to convince consumers to move more of their financial lives onto its platform.
However, BNPL faces criticism from consumer rights campaigners concerned that it promotes the idea that consumers are spending more than they can afford. Regulators are pushing for rules to bring this new but fast-growing payment method under supervision.
The recently elected UK Labor government is expected to Make a plan to buy now, pay later Regulation is quick.
Municipality Minister Tulip Siddiq said in July that the government would develop new proposals “soon” after plans to regulate BNPL were repeatedly delayed by the previous Conservative government.
