Klarna and GoCardless sign US partnership

Swedish BNPL giant Klarna is now showing a global appetite. In addition to Europe, it aims to establish itself in the United States as a reference in payment and purchasing services. Already positioned locally, it is now counting on a major partnership with a world leader in dematerialised payments: GoCardless.

FACTS

• Klarna has signed a partnership with GoCardless. The aim of this partnership is to develop the services offered by Klarna to its 21 million American customers, more specifically, direct debit and account to account payments.

• In particular, Klarna will rely on GoCardless to support its four-installment payment solution, eliminating the need to rely on cards.

• Customers of the service will only have to give their consent for Klarna to initiate account-to-account payments automatically via GoCardless.

CHALLENGES

• Adapting to new uses: According to Motley Fool, a private financial and investment advisory firm, US Generation Z consumers have an average of two credit cards, compared to the national average of three. Credit card adoption rates are declining as new consumers enter the US market, illustrating a major shift in usage in a country that has traditionally had a strong attachment to the credit card.

• Expanding a partnership: Klarna knows what to expect as the Swedish BNPL giant has already been working with GoCardless in the UK since 2018. GoCardless has also been present in the US market since 2019, doubling its workforce there in 2021 and expecting 125% growth in its teams by 2022.

• Continued exploration: Klarna says the US market represents a new Eldorado and its roll-out ambitions are becoming a reality. With more than 21 million American customers, Klarna has seen its portfolio double locally in one year.

MARKET PERSPECTIVE

• The announcement of the extension of this partnership is the opportunity chosen by Klarna to underline its vision of the future of payment. And this vision is clear: it concerns the replacement of the card, as the dominant payment method, by account-to-account payment services.

• Klarna had already entered into a partnership with payment heavyweight Stripe last October. This partnership was intended to benefit both parties and to allow Klarna to rely on Stripe to manage its payment flows in the US.

• Klarna is also working on extending its offer and recently moved away from its 100% mobile model by presenting a browser extension dedicated to BNPL.