Klarna partners with Adyen to bring shop now, pay later in store

Swedish firm Klarna collaborates with Dutch payments fintech Adyen to bring 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 payments products as an option to physical payment machines used by the Amsterdam-based fintech’s trading partners.

Klarna will be included as an option in more than 450,000 Adyen payment terminals in specific locations as a result of the transaction, according to the companies. The partnership will initially launch in Europe, North America and Australia, with a wider rollout planned later.

The Klarna 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 largely associated with online shopping, which currently accounts for around 5% of the global e-commerce market, according to Klarna.

Targeting consumers in-store has become an increasingly important priority as Klarna and other firms in the sector such as BlockAfterpay, Affirm, Zip, Sezzle and Zilch are looking to expand their reach.

The move builds on a previous arrangement Klarna had with Adyen for e-commerce payments.

“We want consumers to be able to pay with Klarna at any checkout, anywhere,” David Sykes, chief commercial officer at Klarna, said in a statement on Thursday.

“Our strong partnership with Adyen gives a massive boost to our ambition to bring flexible payments to the high street in a new way.”

Adyen EMEA head Alexa von Bismarck said the deal is about giving consumers flexibility at checkout, adding that “consumers care deeply about the in-store touchpoint and value brands that can let them pay how they want.”

Earlier this year, Klarna sold Klarna Checkout, the company’s online payment solution for merchants. That made the firm 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, however 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 cashback rewards in an attempt to persuade 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 of ​​consumers spending more than they can afford. Regulators are pushing for rules to bring the nascent — but fast-growing — payment method into regulation.

The recently elected UK Labor government is expected to set out plans for buy now, pay later regulation soon.

City minister Tulip Siddiq said in July that the government would set out new proposals “shortly” after several delays to the previous Conservative government’s settlement plans for BNPL.