On March 17, Swedish payments company Klarna announced a partnership with the consumer finance app OnePay to provide installment loans for purchases at Walmart in the United States. Installment loans, popular for large purchases like electronics and cars, offer fixed payments over a specified period and are often viewed as a cost-effective alternative to credit cards.
Subsequently, U.S.-based buy now, pay later lender Affirm saw an 11% drop in its stock following the news, as Klarna secured the sought-after collaboration. Analysts at BTIG believe there is significant market potential for alternative lenders like Klarna to challenge traditional credit card companies.
Affirm stated, "We win business when merchants want superior performance and maximum value," emphasizing its commitment to product excellence and sustainable partnerships moving forward.
Retailers are increasingly teaming up with financial institutions to provide installment payment options at checkout to attract more sales. Klarna's exclusive partnership with OnePay will be seamlessly integrated into Walmart's checkout process this year, allowing customers to select repayment terms ranging from 3 to 36 months and to manage their loans on the OnePay app.
Sebastian Siemiatkowski, Klarna's co-founder and CEO, remarked, "This is a game changer," expressing excitement about reshaping the shopping experience at Walmart, both online and in-store.
Looking ahead, Klarna is gearing up for its anticipated U.S. stock market debut. With aspirations to raise over $1 billion at a valuation surpassing $15 billion, the fintech is poised for significant growth in the American market.