Klarna will become the exclusive buy now, pay later (BNPL) provider for the world’s largest retailer, Walmart, following its integration with Walmart’s OnePay platform.
Previously operating as One until its rebrand earlier this month, the OnePay platform had relied on Affirm for its BNPL program. According to CNBC, Klarna will now underwrite installment loans ranging from three months to three years, with annual interest rates between 10% and 36%.
While Affirm previously handled these responsibilities, there was initial speculation that OnePay—a fintech startup majority-owned by Walmart—might eventually take on BNPL services itself.
However, OnePay’s decision to partner with Klarna instead is a testament to the BNPL company’s scale and expertise. Apple recently made a similar move when it shut down its in-house BNPL platform Apple Pay Later and selected Affirm to manage its installment loans.
Soaring BNPL Popularity
Retail giants are leaning on companies like Klarna and Affirm as BNPL services surge in popularity among U.S. consumers, who are struggling under a collective credit card debt of $1.21 trillion.
The rise of BNPL has fueled the rapid growth of Klarna and Affirm, transforming them from startups into major financial services players. Until now, Affirm has gained more traction in the U.S., while Klarna has been more established overseas.
Adding Walmart—which boasts 255 million weekly customers—to its client list marks a substantial step in Klarna’s U.S. expansion. The company’s BNPL loans are expected to be available both in-store and online within the next few weeks. By the end of the year, Klarna will be the exclusive BNPL provider at Walmart.
Traction Ahead of IPO
This new comes on the heels of Klarna becoming the BNPL provider for the world’s largest merchant acquirer. Klarna recently secured a deal with JPMorgan Payments to offer its installment loans in roughly 900,000 businesses.
These developments are further heightening anticipation for Klarna’s long-awaited U.S. initial public offering. According to CNBC, Klarna’s stock is currently valued at around $15 billion, roughly the same as Affirm.
