Klarna founder and chief executive Sebastian Siemiatkowski
(Picture: Dave Benett/Getty Images for Kla)Klarna has struck a landmark deal with payment company Stripe that will allow millions of small businesses around the world to use Klarna’s buy now, pay later product.
Stockholm-headquartered Klarna said it has signed a strategic partnership with Stripe, the San Francisco-based fintech business founded by two Irish brothers.
The deal brings together two of the biggest online fintech businesses in the world. Klarna, founded in 2005, pioneered the next-generation credit product ‘buy now, pay later’ and was valued at $46 billion earlier this year. Stripe, founded in 2009, builds software that helps businesses take payments and deal with other financial transactions online. Investors valued the business at $95 billion earlier this year.
Today’s partnership means companies that use Stripe’s software will be able to use Klarna as a payment method without striking a direct partnership with the Swedish company. Millions of businesses use Stripe around the world, including Missguided and Glossier.
As part of the partnership, Klarna will route more of its payment volumes through Stripe’s platform. The company currently uses Stripe for 90% of payments in the US and Canada and plans to expand that further.
Koen Köppen, chief technology officer at Klarna, said: “Together with Stripe, we will be a true growth partner for our retailers of all sizes, allowing them to maximize their entrepreneurial success through our joint services. By offering convenience, flexibility, and control to even more shoppers, we create a win-win situation for both retailers and consumers alike.”
Will Gaybrick, chief product officer at Stripe: "We’re thrilled to partner with Klarna so millions of businesses on Stripe globally can offer increased payment flexibility. Klarna’s payment options are a powerful tool for online businesses to attract more customers, boost conversion rates, increase basket sizes, and thus grow their revenue.”
Buy now, pay later allows customers to spread purchases over multiple interest-free payments. It has grown rapidly in the last few years as online shopping has soared due to the pandemic. Critics say the payment method can be a debt trap and say platforms like Klarna don’t do enough to sign post the risks to consumers. The UK’s Financial Conduct Authority has called for urgent regulation of the space, flagging potential consumer harm.
