Klarna Expands Buy Now, Pay Later Services to Physical Stores Through Adyen Partnership

Swedish fintech giant Klarna has entered into a significant partnership with Dutch payments company Adyen, allowing Klarna’s popular buy now, pay later (BNPL) services to be available in physical retail stores, according to CNBC. While Klarna’s BNPL option has been primarily associated with online shopping, this partnership marks a major step in extending the service to brick-and-mortar locations. Under the agreement, Klarna’s BNPL payment option will be integrated into over 450,000 Adyen payment terminals across Europe, North America, and Australia, with future plans for a broader global rollout.

Klarna’s BNPL service enables consumers to split their purchases into interest-free installments, a model that has gained considerable traction in the e-commerce sector. According to Klarna, BNPL currently represents around 5% of global e-commerce transactions. However, the company’s ambition is to expand beyond the digital realm and capture the in-store consumer market as well. David Sykes, Klarna’s Chief Commercial Officer, said of the partnership, “We want consumers to be able to pay with Klarna at any checkout, anywhere.”

This expansion builds on Klarna’s existing relationship with Adyen, which has previously involved e-commerce payment solutions. The move to physical stores aligns with Klarna’s broader goal of reaching a wider consumer base. Alexa von Bismarck, Adyen’s head of EMEA, also highlighted the importance of flexibility in consumer payments: “Consumers care deeply about the in-store touch point and value brands which can allow them to pay how they want.”

The partnership comes as Klarna continues to make strategic moves within the financial landscape. Earlier this year, Klarna sold its online checkout service, Klarna Checkout, in order to focus less on competing with payment gateways like Adyen, Stripe, and Checkout.com, and more on building out its BNPL offerings. Klarna is also reportedly exploring a potential IPO. While no specific timeline has been set, Klarna’s CEO, Sebastian Siemiatkowski, has said that a public offering in 2024 is “not impossible.”

However, the BNPL industry has faced criticism from consumer rights groups and regulators. There are concerns that the BNPL model encourages excessive spending, particularly among young consumers, by making it easier to delay payments. In response to these concerns, regulators are working on introducing regulations to bring more oversight to the growing BNPL sector. In the U.K., for example, the newly elected Labour government is expected to introduce regulatory plans soon, following several delays under the previous Conservative administration.

Beyond the Adyen partnership, Klarna has been expanding its product lineup in a bid to encourage consumers to use more of its financial services. In August, the company introduced a checking account-like service called Klarna Balance, as well as cashback rewards to attract more users to its platform.