Klarna, the Swedish financial technology company specialising in buy now, pay later (BNPL) services, has announced an expanded partnership with Adyen, the Dutch payment processing platform, to extend its offerings to physical retail locations.
The collaboration will see Klarna’s BNPL options integrated into Adyen’s in-store payment terminals across Europe, North America and Australia.
This move marks a significant step in Klarna’s strategy to extend its services beyond online retail, where it has established a strong presence.
BNPL in brick-and-mortar stores
Under the agreement, Klarna’s payment methods will be available on more than 450,000 Adyen payment terminals in brick-and-mortar locations. The initial rollout is set to begin with a pilot phase, with wider availability planned for October.
The integration will utilise Klarna’s Dynamic QR solution. This system allows customers to scan a QR code displayed on the Adyen terminal and complete the transaction on their mobile device using one of Klarna’s interest-free BNPL payment options.
David Sykes, Chief Commercial Officer at Klarna, says: “We want consumers to be able to pay with Klarna at any checkout, anywhere. Our strong partnership with Adyen gives a massive boost to our ambition to bring flexible payments to the high street in a new way.”
Expanding digital payments in physical retail
The partnership represents a convergence of online and offline payment technologies, as fintech companies seek to capture a larger share of in-store transactions. BNPL services allow consumers to split the cost of purchases into interest-free instalments, which currently account for approximately 5% of the global e-commerce market, according to Klarna.
Adyen, which provides payment processing services for businesses, views this collaboration as an opportunity to enhance its offering to merchants seeking flexible payment options.
Alexa von Bismarck, President of EMEA at Adyen, adds: “We’re excited to work together on this pilot, offering shoppers a new, flexible way to pay that will redefine the in-store experience.
“This launch highlights the strength of our collaboration with Klarna as we bring their Buy Now Pay Later payment method to in-store terminals for the first time.”
BNPL industry growth and challenges
The BNPL sector has experienced rapid growth in recent years, particularly in online retail. However, the expansion into physical stores represents a new frontier for companies like Klarna.
This move comes as traditional financial institutions and established payment providers are also entering the BNPL market, intensifying competition.
The technical implementation of Klarna’s service on Adyen terminals involves several components. When a customer chooses to pay with Klarna, the Adyen terminal generates a unique QR code. The customer then scans this code using their smartphone, which opens the Klarna app or a web-based interface.
Through this interface, customers can select their preferred BNPL option, such as splitting the payment into three interest-free instalments or paying the full amount within 30 days.
Once the customer confirms the payment method, the transaction is processed, and the merchant receives confirmation through the Adyen terminal.
For retailers, the integration of Klarna’s services into Adyen’s widely-used payment terminals could simplify the process of offering BNPL options to customers. This may be particularly attractive to merchants looking to provide a consistent payment experience across their online and offline channels.
The move comes as Klarna explores the possibility of an initial public offering (IPO). While no fixed timeline has been set, the company’s CEO Sebastian Siemiatkowski previously indicated that a 2024 IPO would not be ‘impossible’.
Sykes of Klarna concludes: “This launch builds on our long-standing partnership with Adyen, simplifying payments and improving the customer experience for thousands of retailers worldwide.”
