Klarna Is Launching A Physical Card In The UK For Its Buy-now-pay-later Service

Buy-now-pay-later services (shortened as BNPL) have become increasingly popular these past few months, thanks to the pandemic and the wave of change that came with it. With BNPL, people can make purchases and pay at a later date at a little or (mostly) no-interest basis, and Klarna, one of Europe’s biggest fintech providing the BNPL service is taking BNPL services as we know it to another level with a physical card it is launching in the UK.

On Wednesday, Klarna announced the launch of a physical Klarna card. This card is a Visa card that’ll allow people to pay later for their purchases and it doesn’t matter if they are shopping online or at a physical store. What this means is that Klarna is tying its BNPL services to these Visa powered cards.

According to Klarna, the card is already available in Sweden (it’s home country) and Germany, and already more than 800,000 people already use it. The card being introduced in the UK will make its first appearance in a non-EU country. Klarna has also been doubling its efforts of expanding into the UK, as well as America. In November last year, after launching in the US, the company mentioned that Klarna cards would soon be available to users in the US. According to Klarna’s co-founder and CEO Sebastian Siemiatkowski, introducing these Klarna services to users in the US is a natural extension of what has been available in its other markets. Speaking on the incoming Klarna cards, he said “We are super excited to launch a card in the US. As we have seen in other markets, we want people to use Klarna everywhere. Some will occasionally use Klarna on websites and the app, but when you give them a piece of plastic, they are also highly appreciative and people love it”. Now that Klarna cards are available to UK users, American users can expect theirs to get to them sooner.

Klarna says the Klarna Card will, at first, only include its “Pay in 30” feature. This feature allows users to pay their debt within a 30-day period. It will add additional plans in the future, the company added. Like other BNPL companies, Klarna’s basic product allows users to split their purchases over a period of monthly instalments that are typically free from interests. Klarna makes money from charging a small commission on each transaction for retailers offerings its payment method.

Klarna cards come in black and pink and will send out a push notification to users when transactions are made. Users also get to enjoy an extension on their due dates for payments for up to 10 days and this is still free.

While Klarna cards are available in select countries, for now, it is looking at rolling out to every customer by early 2022 and has opened a waitlist where users can apply for the card. Speaking on the UK Klarna Card launch, the company’s UK head Alex Marsh 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 U.K. brings those benefits to the offline world, giving consumers the control and transparency of BNPL for all of their in-store purchases”.

The Klarna Card launch in the UK comes at a time when there is growing scrutiny in the BNPL sector. But in October last year, the company introduced changes to its offering. The plan was to make these changes ahead of time so that it’ll be out of regulators’ radar when the country begins to tighten regulation on the buy-now-pay-later sector. Klarna spokesman Daniel Greaves also mentioned that Britain’s FCA is “fully aware of the product and how it works,” and that the firm received the go-ahead from regulators before launching.

Klarna remains one of Europe’s most valued private firms and its Klarna Card promises to unlock new heights for the company.