Klarna partners with fintech startup Adyen to bring ‘buy now, pay later’ to physical retail stores

With rising financial pressures, millions of shoppers are turning to buy now, pay later (BNPL) services to manage their purchases. Adobe’s latest forecast predicts that consumers will spend a record-breaking $18.5 billion through BNPL this holiday season. While BNPL services have mostly been limited to online shopping, Klarna, Europe’s leading fintech startup, is now bringing this option to physical retail stores through a new partnership with Dutch payments company Adyen.

Last Thursday, Klarna announced its collaboration with Adyen to integrate its popular BNPL service into physical retail locations, as reported by CNBC. Klarna will now offer its payment products on Adyen’s payment terminals, allowing in-store shoppers to opt for flexible payment plans at the checkout.

This partnership comes as good news for Adyen, which faced significant financial challenges just a year ago. In August 2023, Adyen’s stock plummeted by 39%, wiping out €18 billion ($20 billion) from its market capitalization in a single day due to slower-than-expected revenue growth. The stock continued to drop an additional 2.9% the following day.

Under the new agreement, Klarna’s BNPL option will be available on more than 450,000 Adyen payment terminals across physical retail stores. The initial rollout will begin in Europe, North America, and Australia, with further expansion planned for the future.

Klarna’s BNPL service, which allows customers to pay in interest-free installments, has largely been associated with online shopping, where it accounts for around 5% of global e-commerce. However, expanding into physical stores is a critical step for Klarna and other BNPL providers like Afterpay, Affirm, and Zip as they seek to broaden their reach beyond e-commerce, CNBC reported.

This collaboration builds on a previous partnership between Klarna and Adyen focused on online payments.

“We want consumers to be able to pay with Klarna at any checkout, anywhere,” David Sykes, chief commercial officer at Klarna, said in a statement. “Our strong partnership with Adyen gives a massive boost to our ambition to bring flexible payments to the high street in a new way.”

Adyen’s Head of EMEA, Alexa von Bismarck, emphasized the importance of giving shoppers more choice at checkout, saying, “Consumers value the in-store experience and are loyal to brands that allow them to pay on their terms.”

Earlier this year, Klarna sold off its Klarna Checkout service, which had been competing with other payment gateways like Adyen, Stripe, and Checkout.com, allowing Klarna to focus more on its core services.

Founded in 2006 by Pieter van der Does and Arnout Schuijff, Adyen provides businesses with a global platform to process various forms of electronic payments, both online and offline. This latest deal furthers Adyen’s mission to create seamless payment experiences across all channels.

Klarna was founded in 2005 by Sebastian Siemiatkowski, Niklas Adalberth, and Victor Jacobsson. The fintech giant simplifies online shopping with its BNPL model. With over 12 million active users each month and 55,000 daily downloads, Klarna has quickly become a leading provider in the BNPL space.