Klarna: ‘buy now, pay later’ firm to launch card in the UK

theguardian.com:

“Buy now, pay later” giant Klarna is putting further pressure on banks and credit card firms by launching its first physical card in the UK.

The card will allow customers to delay payments for up to 30 days when used at high street shops, having previously only offered buy-now-pay-later (BNPL) products online for UK customers. The Swedish company said it intends to add more of its payment options, including splitting purchases into three monthly payments, to the card over time.

Klarna confirmed it had built up a waitlist of 400,000 consumers in the UK, which it claimed showed “strong demand for a new approach to credit,” following a successful launch in Germany and Sweden.

Klarna Card is part of the payment giant’s latest efforts to rival major credit card firms and banks that offer consumer loans, by giving customers the chance to delay payments at physical shops without incurring interest charges or late fees.

“Consumers are rejecting credit products which charge double-digit interest rates while allowing repayments to be put off indefinitely,” Alex Marsh,head of Klarna’s UK operations, said.

“For online purchases where credit makes sense, buy-now-pay-later has become the sustainable alternative with no interest and clear payment schedules. The launch of Klarna Card in the UK brings those benefits to the offline world, giving consumers the control and transparency of BNPL for all of their in-store purchases.”

The firm – whose BNPL products are unregulated – has enjoyed explosive growth during the pandemic, particularly among the under-30s and those with tight finances.

But BNPL products have also drawn criticism, with consumer body Which? warning earlier this month that stronger safeguards are needed to protect the millions