Swedish buy now pay later available on all online retailers launches down under
Swedish buy now pay later service Klarna launched in Australia on Thursday, enabling customers to buy from any online retailer, pay in four equal instalments without interest and fees.
The offer, which is backed by the Commonwealth Bank, will also let CBA customers link their accounts to enable use of the service in a few steps.
“Australian consumers’ expectations are evolving, they demand seamless, intuitive and transparent online shopping services that better meet their daily needs,” Klarna chief executive officer Sebastian Siemiatkowski said.
“This partnership with CBA is rooted in a shared obsession on how good digital experiences can truly serve consumers today. We believe the future of retail is high tech powering high touch experiences, so regardless of how and when customers want to shop and pay, we need to be there for them.”
Eligible customers will be able to download the Klarna app, and subsequently create a single-use, prepaid ‘Ghost card’ which will be filled with a dollar amount specified, plus a transaction fee, and then used to complete a purchase.
The transaction will look like any regular debit or credit card payment to the merchant, but allows the customer to pay it off over time.
According to the business, it is currently used by more than 85 million users, and is partnered with more than 205,000 merchants, across North America, the UK and Europe – such H&M, Adidas, IKEA, ASOS, Boohoo, Ticketmaster, and more.
Businesses that partner with the service will be charged a fee, but will receive data based on opt-in customer wish lists in order to better personalise their offers.
“At the core of this is the privacy of the consumer,” Siemiatkowski told Internet Retailing.
“If a customer says they want to buy something, we can try to get an offer from a merchant. It makes the offer better, and it’s a win for everybody.”
While Siemiatkowski didn’t name names, the business is keen to partner with Australian brands and retailers, and said there would be some announcements soon.
“It’s an interesting market from a retail perspective. There’s a lot of cool brands that have gone global from Australia, so we’re keen to build a local presence,” Siemiatkowski said.
“We’re available in 17 markets, and I think Australia is an important market for many retailers. It’s trend setting, so as a consequence it was natural for us to offer our service here as well.”
Industry to act on senate suggestions
Yesterday, buy now pay later providers Afterpay, Zip, Latitude and Openpay committed to consumers safeguards, spurred on by a senate enquiry last year.
According to the ABC, Australian financial industry association chief executive Diane Tate said the sector wanted to protect its customers and eliminate irresponsible practices.
“We have heard criticisms that young people could lose control of their spending, so the code includes a clause which says buy now pay later products won’t be available to people under 18,” Tate said.
“There is another area of concern, which is about people getting over-committed, [so we’re] doing upfront assessment to make sure the customers are suitable for the product. And another area which is really important in this code also is putting in a cap on late fees.”
It isn’t clear if Klarna is set to join the AFIA, though Siemiatkowski said many of the ideas put forward seemed like they should be “a given” in the industry.
“I think it’s positive that the industry is trying to improve. But specifying 18 years old? Do we need to say that? It’s such a given.
“We’ve been doing this for 15 years, and we want to build a long term product for our customer. We’re the first to do a credit check on all customers – that’s important.”