Swedish company Klarna is collaborating with Dutch payments fintech Adyen to integrate its buy-now, pay-later (BNPL) service into physical retail environments. The announcement made on Thursday detailed that this agreement will facilitate the incorporation of Klarna’s payment services into physical payment terminals used by Adyen’s merchant partners.
As part of the collaboration, Klarna’s services will be accessible on over 450,000 Adyen payment terminals located in brick-and-mortar stores. The rollout is set to begin in Europe, North America, and Australia, with broader implementation planned for the future. Klarna’s BNPL service, which allows consumers to pay for purchases over time without interest, is predominantly associated with online shopping, accounting for approximately 5% of the global e-commerce market according to Klarna.
Expanding their reach to in-store consumers has become a strategic priority for Klarna and other competitors in the BNPL sector such as Block’s Afterpay, Affirm, Zip, Sezzle, and Zilch. This latest move builds on Klarna’s existing partnership with Adyen for online payment processing.
David Sykes, Chief Commercial Officer at Klarna, stated that the goal is to enable Klarna payments at any checkout location, emphasizing that their partnership with Adyen is crucial in bringing flexible payment options to the high street. Adyen’s Head of EMEA, Alexa von Bismarck, highlighted the deal’s objective to provide consumers with flexibility at the point of sale, noting that consumers value brands that offer diverse payment options.
Earlier in the year, Klarna sold its online checkout solution, Klarna Checkout, a move that resulted in less direct competition with payment gateways such as Adyen, Stripe, and Checkout.com. The partnership with Adyen comes as Klarna contemplates a potential initial public offering (IPO). While no fixed timeline has been established, CEO Sebastian Siemiatkowski suggested that an IPO in 2024 isn’t out of the question.
In August, Klarna introduced a product akin to a checking account called Klarna balance, alongside cashback rewards, in an effort to onboard more consumer financial activities to its platform. However, the BNPL sector has faced criticism from consumer rights advocates who argue it risks encouraging excessive spending by consumers. Regulators are advocating for the formal regulation of this rapidly growing payment method.
The recently elected U.K. Labour government is anticipated to propose new regulations for BNPL soon. City Minister Tulip Siddiq indicated in July that the government would present new regulatory proposals following delays under the previous Conservative government.