Klarna and Xero enable SMEs to offer BNPL

Klarna recently decided to resell its Klarna Checkout (KCO) service to focus on its split payment activities. Today, the Swedish BNPL giant is pursuing its ambitions in this direction while renewing its approach. Klarna partners with software specialist Xero to offer flexible payment options to end customers through SMEs.

FACTS

• Klarna has recently teamed up with Xero, a technology company and provider of accounting software for small businesses.
• Their partnership results in the launch of a new “buy now pay later” solution open to SMEs in BtoBtoC.
• Small business customers of Xero can now offer Klarna’s flexible payment options to their own customers. The latter can thus settle the SMEs in instalments, while allowing the SMEs to receive the entire payment of their benefit.
• In addition to its practicality, Klarna emphasizes the security of its offer and the guarantee of repayment of loans granted, which is ensured by its ability to verify the financial health of final customers.

CHALLENGES

• A relevant BtoBtoC model: With Xero, Klarna opens up a new market and becomes capable of managing the settlements to SMEs. It therefore relies on btobtoc in order to reach end customers in an innovative way, while responding to a real problem of SMEs.
• Better meeting needs: According to a report by Xero, offering more payment options to small business customers helps them grow by allowing them to be paid faster and thus help them with cash flow problems.
• Ensuring the security of transactions: Klarna also highlights its expertise in managing default risks. It points out that it thus achieves a 99% loan repayment rate. It even states that 40% of the repayments are actually made in advance by users of its services. Klarna therefore enables SMEs to strengthen their treasury while promoting an efficient and secure payment system.

MARKET PERSPECTIVE

• The BNPL was already a service offered to SMEs by various actors such as Amazon, Quonto or Younited.
• Today, the Swedish BNPL giant Klarna is relying on a new partnership signed by Xero to renew the approach of BNPL to SMEs. Their solution is distinguished by its btobtoc model, which ultimately allows SMEs to accept BNPL payments from their customers.
• The BNPL market continues to generate interest and participate in the development of innovative initiatives.
• In addition to klarna, other players are also now involved in the deployment of an alternative service for individuals. This type of offer, called "Send Now, Pay Later", has just been launched by Astra Tech in the Middle East and North Africa region. And it apparently raises interest, judging by the latest fundraising in Dubai by another specialist on the subject, Pomelo.