Klarna partners with GoCardless to make ‘inroads’ into US

Buy-now-pay-later (BNPL) provider Klarna has chosen global payments platform GoCardless to be able to offer bank debit payments to its more than 21 million customers in the US, having worked with the account-to-account (A2A) payments provider in the UK since 2018.

Klarna said that it will use GoCardless for its ‘Pay in 4’ offering, which enables users to pay in four interest-free instalments when they choose ‘Pay in 4’, as well as across monthly payments with Klarna financing, thereby reducing the risk of failed or late payments.

Klarna reached 20 million users in the US in August this year.

Koen Köppen, CTO at Klarna, said: “The US is a key market for Klarna and we continue to see strong growth, doubling our customer base to over 21 million from last year. To continue along that trajectory we need partners that not only provide our consumers and retailers more choice and control but also offer us cutting-edge technology and best-in-class service.

“We’re excited to work with GoCardless and leverage its expertise in account-to-account payments as we expand in the US.”

Hiroki Takeuchi, co-founder and CEO of GoCardless, predicted “rapid growth” for alternative payment methods, given rising card fees and less of an appetite among consumers for getting into debt.

“Not only does this include making purchases with buy now, pay later, it also extends to how shoppers prefer to pay off their balances – namely, through their bank account, whether that’s powered by ACH debit or newer technology like Open Banking,” added Takeuchi.

“Over the next few years we expect account-to-account payments to challenge the dominance of cards as they tap into changing consumer demand and provide merchants significant benefits in terms of cost, conversion and churn.”

GoCardless entered the US in 2019 and, since then, has opened a second office in New York City and doubled its headcount in 2021.

By the end of 2022, GoCardless plans to grow its US team by another 125%.