Key Takeaways:
– Klarna partners with Adyen to bring buy now, pay later (BNPL) service to physical retail stores.
– Klarna aims to be available at any checkout with the help of its strong partnership with Adyen.
– The Swedish firm is planning an initial public offering, though no timeline has been set yet.
Klarna Teams Up with Adyen
Aiming to expand to physical retail stores, Klarna, the renowned ‘buy now, pay later’ firm, has announced a partnership with Adyen, the Dutch fintech company. Together, they plan to integrate Klarna’s payment products into physical payment machines used by Adyen’s merchant partners. Initially, the service will launch in Europe, North America, and Australia, with more global rollout planned in the future.
A Bulwark of Flexible Payments on the High Street
Klarna will soon be an option at over 450,000 Adyen payment terminals in brick-and-mortar locations due to this new partnership. The move will not only enhance the consumer’s buying experience but also aid in Klarna’s competing with other BNPL firms like Afterpay, Affirm, Zip, Sezzle, and Zilch.
David Sykes, Chief Commercial Officer at Klarna, stated, “We want consumers to be able to pay with Klarna at any checkout, anywhere.” He emphasized how this strengthens their ambition to bring flexible payments to the ‘high street’ in a novel way.
Prioritizing Customer Value and Flexibility
Consumers have shown great interest in flexibility at checkouts, a feature both Klarna and Adyen aim to capitalize on. “Consumers care deeply about the in-store touchpoint and value brands that allow them to pay how they want,” commented Alexa von Bismarck, Adyen’s head of EMEA.
A Tactical Partnership
This collaboration between Klarna and Adyen is building on an earlier agreement the two had in place for e-commerce payments. Earlier this year, Klarna sold its online checkout solution, Klarna Checkout, to compete less directly with payment gateways including likes of Adyen, Stripe, and Checkout.com. This partnership thus goes in line with the strategy and helps the firm extend its services beyond e-commerce.
Klarna Eyes Upcoming IPO
As it steps into this beneficial agreement with Adyen, Klarna is also considering a much-anticipated initial public offering. While no timeline has been confirmed yet, Klarna’s CEO Sebastian Siemiatkowski did mention earlier this year that a 2024 IPO for the business wouldn’t be “impossible.”
Overcoming Consumer Rights Issues
The BNPL model has faced criticism from consumer rights campaigners over concerns regarding increased consumer spending beyond their affordability. However, Klarna has been making strides to address these concerns. In August, the firm launched a checking account-like product, called Klarna balance, along with cashback rewards to convince consumers to transition more of their financial lives to its platform.
This new deal with Adyen stands as a testament to Klarna’s growing influence. As regulators continue to scrutinize the BNPL model, Klarna’s aim to return to profit by summer 2023 looks like a solid target. The company’s push into physical retail brings an interesting dimension to the scope of the BNPL model in traditional retail environments, offering ample growth opportunities for both Klarna and Adyen.