Klarna expands buy now, pay later service for Adobe Commerce merchants

This sound is generated automatically. Let us know if you have feedback.

Brief description of the dive:

Klarna has partnered with Adobe Commerce to enable merchants to offer buy now, pay later services, according to Tuesday’s press release.
The agreement will make Klarna’s installment payment services available to more customers who purchase from merchants via Adobe Commerce, the release said.
“Consumers appreciate the flexibility that buy now, pay later services offer, with Adobe Analytics data showing more than 11 percent growth this year,” Jason Knell, senior director of content and channel partners at Adobe, said in a statement.

Diving Insight:

Klarna’s partnership with Adobe Commerce builds on the buy now, pay later platform’s previous efforts to attract more customers in a difficult economic climate. Earlier this year, the company introduced a subscription service which would allow customers to pay a monthly fee to avoid service fees while still receiving loyalty points and access to promotional offers through merchant partners. Now, the Adobe Commerce deal allows more merchants to offer Klarna services.

“Our partnership with Adobe Commerce offers thousands of merchants a flexible, seamless and frictionless way to accept payments,” Erin Jaeger, head of North America at Klarna, said in a statement. “This improves the shopping experience for consumers and increases merchant operational capabilities.”

Eeke de Milliano, global product manager at Stripe, told sister publication Payments Dive in a recent interview that BNPL volume increased by 172% in the last year. However, de Milliano noted that “buy now, pay later options are priced at a premium, and retailers are still trying to understand their value.” Meanwhile, last month, Apple closed its BNPL service. Instead, the company will offer installment loans to users of its digital wallet through debit and credit cards and other lenders starting later this year, when paid with Apple Pay.

Although BNPL usage appears to be growing, research suggests that many consumers using the service are looking to reduce pressure on their tight budgets. Half of BNPL customers used the payment option to spread the cash flowaccording to a YouGov and Bankrate study published in March. Nearly 30% of BNPL users said they spent too much money using the option. In addition, “financially fragile” consumers are using buy now, pay later services and “seem to have adopted BNPL as a regular payment option,” according to research from the Federal Reserve Bank of New York.