Klarna Expands Beyond Buy Now, Pay Later with Savings and Cashback

Ibrahim Awotunde

Klarna, the Swedish fintech giant, is expanding its offerings beyond buy now, pay later (BNPL) with the launch of two new features designed to make their platform more attractive to users.

Introducing Klarna Balance

This feature allows consumers in the U.S. and 11 European countries to store money directly within the platform. Users can deposit funds from their bank accounts and utilize the balance to pay for purchases in full, contribute to BNPL installments, or potentially receive future benefits.

While Klarna doesn’t currently offer interest on these accounts in the U.S., the company plans to add this feature in the future. Notably, European users already benefit from interest rates up to 3.58%.

Earning Cashback Without a Klarna Card

Consumers can now earn cashback on purchases through the Klarna app, regardless of whether they use a Klarna-issued credit card. By shopping at participating retailers through the app, users can earn a percentage of their purchase amount deposited into their Klarna Balance.

The cashback percentage varies by retailer, but can reach as high as 10%. This incentive is funded directly by participating merchants.

Building a Financial Ecosystem:

These new features suggest Klarna’s ambitions to evolve beyond its BNPL roots and establish itself as a broader financial platform. The Klarna Balance account could potentially be used for future features, hinting at a more comprehensive financial ecosystem in development.

Competition and Future Expansion:

Klarna’s credit card launch in the U.S. placed them in competition with the likes of Apple and Robinhood, which also offer cashback rewards. However, unlike the Klarna card, these new features allow users to earn cashback without requiring a specific credit card.

While not a direct competitor to large digital banks like Revolut, these developments suggest Klarna’s trajectory towards a more comprehensive financial services model.