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Klarna Intros One-Time Virtual Cards For Interest-Free Shopping Anywhere In UK

Klarna is now offering a new shopping feature that gives U.K. users the ability to buy products interest-free using its app at any online merchant even if they’re not partnered with the Swedish buy now, pay later (BNPL) firm.

Sebastian Siemiatkowski, CEO of Klarna, said in a Monday (June 7) press release that the in-app tool gives people an option to pay in installments without incurring credit card interest and fees.

“Shoppers now can interact with their favorite retailers without having to leave the Klarna app, to create a smooth, safe and frictionless shopping experience. Our one-stop shop app is the future of shopping, it creates a truly personalized and bespoke service for every user and liberates consumers from ever paying more than the price of the product,” Siemiatkowski said.

Klarna’s Pay in 3 option lets users create a one-time virtual debit card issued by Klarna and that works over card rails. The card covers the value of the purchase, eliminating the need for a credit card. The shopping app also integrates with users’ monthly budgets and spending limits and updates users when prices drop and daily deals.

The feature is live in the U.S., Australia and Sweden where the app is used by 6.5 million people on average each month, per the release. 

Klarna also recently partnered with retail giants SPARC Group and Authentic Brands Group (ABG) to extend its “Pay in 4” BNPL service to more retail brands. Some of Authentic’s brands include Aéropostale, Brooks Brothers, Nine West and Nautica.

SPARC Group designs, manufactures, distributes and markets apparel and accessories. Its parent companies are Simon Property Group and Authentic Brands Group

At the end of last month, Klarna, backed by SoftBank, closed a funding round that could bring its valuation to $40 billion.

A recent report from PYMNTS showed that 32 percent of consumers who reported having trouble handling monthly expenses turned to BNPL for Black Friday purchases in November 2020. Other research has indicated that some 48 percent of shoppers said they wouldn’t use a merchant that didn’t credit options at the point of sale (POS) — including BNPL.

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