“Buy-now, pay-late” company Klarna aims to return to profit by the summer of 2023.
Jakub Porzycki | NurPhoto | Getty Images
Swedish company Klarna collaborates with Dutch payments Fintech Adyen to bring its popular buy now pay later service to physical retail stores.
The company said on Thursday it had struck a deal with Adyen to add its payment products as an option to physical payment machines used by the Amsterdam-based fintech’s merchant partners.
Klarna will be included as an option in more than 450,000 Adyen payment terminals in brick and mortar locations as a result of the deal, according to the companies. The partnership will initially launch in Europe, North America and Australia with a wider rollout planned later down the line.
Klarna’s Buy Now, Pay Later or BNPL service allows users to spread the cost of their purchases over a period of interest-free installments. The service is primarily associated with online shopping, which currently accounts for around 5% of the global e-commerce market, according to Klarna.
In-store targeting of consumers has become an increasingly important priority as Klarna and other companies in the sector such as BarrierThe company’s Afterpay, Affirm, Zip, Sezzle and Zilch are looking to expand their reach.
The move expands on a previous deal Klarna had with Adyen for e-commerce payments.
“We want consumers to be able to pay with Klarna at any checkout, anywhere,” David Sykes, Klarna’s chief commercial officer, said in a statement on Thursday.
“Our strong partnership with Adyen gives a huge boost to our ambition to bring flexible payments to the high street in a new way.”
Adyen’s head of EMEA Alexa von Bismarck said the deal was about giving consumers flexibility at checkout, adding that “consumers care deeply about the in-store touchpoint and the value brands enable to pay as they wish”.
Earlier this year, Klarna sold Klarna Checkout, the company’s online checkout solution for merchants. This has led the company to compete less directly with payment gateways including Adyen, Stripe and Checkout.com.
Klarna’s deal with Adyen comes as the Swedish tech giant explores a long-awaited initial public offering.
Klarna has yet to set a firm timeline for when it expects to go public, but the company’s CEO Sebastian Siemiatkowski told CNBC earlier this year that a 2024 IPO for the business would not be “impossible.”
In August, Klarna began rolling out a checking account-like product called Klarna balance, as well as cash back rewards in a bid to get consumers to move more of their financial lives to its platform.
BNPL has faced criticism from consumer rights campaigners, however, over fears that it is promoting the idea that consumers are spending more than they can afford. Regulators are pushing for rules to regulate the nascent — but fast-growing — payment method.
The recently elected UK Labor government is expected to draw up plans to buy now, pay later soon.
City Minister Tulip Siddiq said in July that the government would draw up new proposals “shortly” after multiple delays to the previous Conservative government’s regulation plans for BNPL.
