Amid reports that buy now, pay later purchases are poised for another big jump this holiday season, Swedish financial giant Klarna is partnering up with Dutch payments fintech Adyen to expand BNPL options in physical retail stores.
Under the agreement, Klarna’s services will be available at more than 450,000 of Adyen’s physical payment terminals, initially launching across Europe, North America, and Australia.
“BNPL grew over the pandemic as a popular alternative method of financing for online transactions and has more recently become competitive for in-store wallet share,” said Ben Danner, Senior Analyst of Credit and Commercial at Javelin Strategy & Research. “Nearly every mall I’ve been in recently has a Klarna banner flying right in the center advertising the service. Partnering with Adyen, which has a strong global presence and excels at omnichannel retail, is a great move as Klarna continues to grow its in-store presence.
The new rollout positions Adyen as the launch partner for Klarna’s Dynamic QR solution. Customers can scan a QR code displayed on Adyen’s terminal and complete the transaction on their smartphones. Purchases can then be tracked via the Klarna app.
Adyen has been expanding in a number of different directions over the past couple of years. In addition to Klarna, it has formed alliances with companies ranging from Plaid to McDonald’s.
Poised for Growth
At this point, BNPL is mostly associated with online shopping, but Klarna is hoping to shift this perception by offering consumers the flexibility to pay how they choose—whether online or in-store.
This is an opportune moment for BNPL to make further inroads into physical retail. Last year, a study from the Federal Reserve found that while only 9% of all consumers used BNPL, this represented an increase of nearly 40% from two years earlier.
Looking ahead, U.S. shoppers are expected to spend a record $18.5 billion using BNPL services for holiday purchases in Q4 2024, according to a new forecast from Adobe Analytics. This would represent a 11.4% increase in BNPL usage compared to last year’s of 11.4% over last year’s holiday season. Adobe attributes the increase in part to the rising debt levels many consumers are facing; the average American now carries more than $6,000 in credit card debt, per data from TransUnion.