Buy Now, Pay Later (BNPL) provider Klarna has agreed to become Walmart’s exclusive provider of installment loans.
The mentioned collaboration was announced on Monday, March 17th. As part of this partnership, Walmart customers will be given access to flexible payment options in an arrangement that will be integrated into the retailer’s checkout this year.
In a press release published by Klarna, it was noted that OnePay, a consumer financial services platform backed by Walmart and Ribbit Capital, is already part of Walmart’s physical and digital channels. As part of the partnership announced on Monday, OnePay will be able to add installment loans to its product portfolio.
Klarna co-founder and chief executive officer Sebastian Siemiatkowski stated that this is a game changer. He noted that millions of people in the United States shop at Walmart every day, and now they will be able to shop smarter with OnePay installment loans powered by his firm. Also, according to him, OnePay choosing Klarna as their exclusive installment loan partner at Walmart in the US is a huge vote of confidence as the company pursues its goal of being available everywhere for everything.
Moreover, the press release noted that the mentioned deal gives Walmart customers in the United States the opportunity to use Klarna-powered OnePay loans to pay for items with repayment terms of 3 to 36 months.
It is worth noting that Walmart has had a long-standing BNPL partnership with Affirm, which is a competitor to the company headed by Sebastian Siemiatkowski.
An Affirm spokesperson stated during a conversation with media representatives that this firm wins in business when merchants want to achieve superior performance and maximum value, taking into account the advantages of the brand in the areas of underwriting and capital markets. Also in this case, it was underlined that the mentioned company would continue to implement its strategy aimed at competing for products and entering into sustainable partnerships.
It is worth noting that the partnership between Klarna and Walmart comes a few days after the BNPL provider announced that it had filed paperwork for its initial public offering (IPO) of shares. The IPO of the company, headed by Sebastian Siemiatkowski, is what can be described as a long-awaited event. Rumors about Klarna’s listing have been circulating for a long period. It is also worth noting that IPO-related activity has recently shown a revival after the downturn. The negative situation was because of high interest rates and the challenging financing environment.
In a letter included in the filing last week, Sebastian Siemiatkowski wrote that Klarna’s offerings, among others BNPL, have drawn almost 100 million users. According to him, this is an amazingly diverse group of people who have one thing in common, related to their resentment of financial institutions belonging to the category of traditional banks. Sebastian Siemiatkowski stated that they want simple and transparent fees. Also, according to him, these users tend to avoid mishap fees. Moreover, he noted, they want fixed and clear payoff horizons for major purchases. According to him, ultimately, the mentioned users tend to banks that deliver trust by putting their interest first – and preferably interest-free.
Currently, changes are taking place in the consumer community because people are more active in embracing pay-later plans as they seek out more flexible payment options. It is worth noting that statistics show that the mentioned offers are popular among both financially strapped consumers and more comfortable individuals.
People strive for easy and budget-friendly payment options that have an impact on their approach to large and small purchases.
Many consumers, regardless of income level, have used installment plans to streamline spending and preserve their cash reserves. The relevant plans were seen as an effective way to manage spending without sacrificing immediate needs. Most likely, the corresponding tendency will persist in the foreseeable future.
