Marqeta to issue physical cards for Klarna

Klarna is strengthening its partnership with Marqeta and will use its issuing platform to launch its Klarna card in the US. The card will allow users to pay anywhere using Klarna's "Pay in 4" solution online and in-store.

FACTS

• Klarna has been using Marqeta's card issuing platform since 2018 to issue virtual cards.

• As a physical extension of the Klarna app, the physical Klarna Visa card will provide shoppers with the same control, convenience and flexibility when making purchases in physical shops as when using Klarna's Pay in 4 solution.

• Cost of the card: free for the first year, then $3.99 per month. It is available with 2 visual options.

• Reminder of how it works: another debit card must be set as the source of supply. Thereafter, all purchases made with the Klarna card are spread over 4 refunds (without fees) made every fortnight.

CHALLENGES

• Anticipating the effects of credit regulations: Although the new regulations that will govern split payment activities are not yet known, one thing is certain: obtaining credit will be subject to greater security and immediacy could be called into question in the customer experience. To address this, at least on the card side, Klarna will be able to rely on one of the most modern and responsive issuers to provide its customers with physical and virtual cards and to move to digital wallets so that users can start spending immediately after credit approval.

• Spreading its offer more globally: While the Klarna card was previously only offered in the UK, its partnership with Marqeta should enable it to spread the new card to 13 new European markets, in addition to the US.

MARKET PERSPECTIVE

• The launch of the Klarna card comes against the backdrop of Klarna's rapid growth in the US, which continues to be Klarna's fastest growing market in terms of volume.

• Marqeta, meanwhile, reported a 53% increase in the number of transactions processed in the last quarter of 2021; an increase the issuer attributes in part to growth in the Buy Now Pay Later market.