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Klarna to launch payment card

Written by: Emma Lunn
The buy now pay later (BNPL) lender is throwing down the gauntlet to banks and credit card firms by launching its first physical card in the UK.

Klarna says the Klarna Card will empower customers “with greater control, transparency and choice over how they pay” and give consumers “the flexibility to pay later for purchases everywhere, without the inherent risks of interest and revolving credit”.

The Klarna Card will launch with Pay in 30 which allows customers to delay payments for up to 30 days. The payment option will be available wherever cards are accepted. Previously Klarna only offered BNPL online for UK customers.

The Swedish company plans to add additional payment options, such as Klarna Pay Later, in the future.

Alex Marsh, head of Klarna UK, says: “Consumers are rejecting credit products which charge double-digit interest rates while allowing repayments to be put off indefinitely. For online purchases where credit makes sense, buy now pay later has become the sustainable alternative with no interest and clear payment schedules.

“The launch of Klarna Card in the UK brings those benefits to the offline world, giving consumers the control and transparency of BNPL for all of their instore purchases.”

Klarna said the card already has 800,000 users in Sweden and Germany, and it also plans to launch a card in the US.

In the UK, the Klarna Card will be made available to all eligible consumers in the upcoming months; the card currently has a waiting list of 400,000 consumers.

Consumers can sign up to be on the waitlist by tapping ‘Klarna Card’ in the latest version of the Klarna app or via their online account.

The launch of the Klarna card is the latest in a series of new products from the lender. In October the company launched ‘Pay Now’, which allows customers to pay immediately and in full.

Klarna said it has also strengthened affordability checks and checkout language, and provided more ways for consumers to challenge complaints decisions.

BNPL lenders such as Klarna give shoppers the option of delaying or splitting payments with no fees or interest. Critics say such schemes encourage people to spend more than they can afford, with Citizens Advice saying they can be a “slippery slope into debt”. Earlier this month, Which? called for stronger safeguards for BNPL users and said borrowers often don’t understand the risks involved.

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