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The new Klarna post-purchase payments UK card comes on the heels of similar offerings in Sweden and Germany, and is on course to also debut in the US.
Swedish fintech Klarna is launching a physical card in the UK that facilitates delayed payments on both in-store and online purchases. The Klarna card, officially announced on Wednesday, January 26th, is a Visa-enabled card that integrates Apple Pay and Google Pay. Although the card already has a 400,000-person waiting list in the UK, it is already available in Sweden and Germany. There are more than 800,000 users currently enjoying the ‘buy now pay later’ feature of the Klarna card in those countries.
Alex Marsh, head of Klarna in the UK, touched on the platform’s UK card launch. According to Marsh, “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 Klarna card’s UK debut is the first time it arrives in a country outside the European Union. The payment platform is currently on an aggressive expansion in the UK and America. In fact, Klarna says it appears set to also debut its post-purchase payment card in the US sooner rather than later.
How the Klarna UK Card Functions
For now, the Klarna card, which functions interest-free, will initially only include Klarna’s “Pay in 30” feature. This allows shoppers to make purchases and pay off their debts within 30 days after purchase. Furthermore, card users also have the extra option of extending the due date by up to 10 days. Interestingly, doing so will also not incur any additional charges. According to Klarna, it intends to add additional payment options in the future.
Klana users will receive push notifications to their smartphones after using the card. Eligibility for the Klarna card requires that users be over 18 years and have a minimum income of £12,000. Furthermore, the Klarna terms and conditions also specify that users must have a “good credit history.” However, the company did not offer any specifics on this. Klarna makes its money by charging a small fee to retailers offering the platform as a payment option. Also, the firm only facilitates payments of users who have paid off at least one purchase through Klarna on time.
Klarna Looks to Revolutionize Payments Industry
Klarna, founded in 2005, now directly competes with some other notable fintech platforms with the launch of its BNPL card. Some of these competitors include American Express and Monzo – a fintech startup that already competes with Klarna online.
Klarna has often taken issue with the credit card industry for piling debts on consumers, usually in the form of high-interest rates. As Marsh explained:
“Consumers are rejecting credit products which charge double-digit interest rates while allowing repayments to be put off indefinitely.”
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