Klarna is looking to deepen its role in merchant payments, building on its buy now, pay later business through partnerships with payment processors and an expanding portfolio of financial services.
The company already works with Netherlands-based payment service provider Mollie to bring BNPL options to merchants’ checkouts. Now, the companies are extending that relationship to include dispute management tools and consumer foreign exchange capabilities for Mollie’s merchant network.
The expanded partnership gives Klarna access to Mollie’s European merchant base of more than 350,000 businesses. Mollie also recently completed a substantial acquisition of pay-by-bank provider GoCardless, further strengthening its position in the region.
Evolving Beyond Enterprise
This spotlight on merchant services integrations signifies the continued maturation of BNPL.
In the early stages of the market, BNPL providers prioritized partnerships with major enterprise merchants. Last year, for example, Klarna became the exclusive BNPL provider for Walmart, putting its installment payment options in front of customers of one of the world’s largest retailers.
More recently, competitor Affirm signed a multi-year deal to become the exclusive BNPL provider for Sam’s Club. The partnership includes an e-commerce launch ahead of the holiday season, followed by a broader rollout to brick-and-mortar stores next year.
Reaching New Markets
While enterprise partnerships will likely remain an important part of the BNPL growth strategy, relationships with merchant services providers offer another route to market, particularly among small and medium-sized businesses.
Klarna inked a deal with Fiserv to bring its BNPL plans to merchants using Clover, Fiserv’s small business point-of-sale platform. The arrangement gave Klarna access to Clover’s network of more than 100,000 U.S. merchants.
The companies subsequently deepened their partnership, enabling Fiserv’s enterprise merchants to offer Klarna’s payment plans both in-store and online.
The Mollie agreement points to another dimension of BNPL providers’ expansion, and that’s moving beyond installment lending into adjacent financial services. Like several of its peers, Klarna has used its consumer lending business as a foundation for introducing products like peer-to-peer payments, digital assets, and debit accounts.
As BNPL providers broaden their offerings and establish more connections across the payments industry, the role is evolving beyond consumer financing. Partnerships with processors and merchant services providers are helping position companies like Klarna across merchant and consumer payment experiences.