Need to Know
- The five-year partnership will see Macy’s become the first U.S. department store to use Klarna’s BNPL technology.
- Macy’s purchases between $10 and $10,000 will be eligible for Klarna’s financing options.
- Klarna’s other investors include fashion giant H&M.
U.S. department store chain Macy’s has made an undisclosed investment in Klarna, the buy now, pay later payments company based in Sweden.
The investment, the amount of which was undisclosed, will see the two companies embark on a five-year partnership. Macy’s will make Klarna’s installment-payment technology available to online shoppers in the U.S. who are spending between $10 and $10,000, and who qualify for Klarna’s financing.
“We are in discussions with some global retailers on exclusive deals,” Klarna’s CEO Sebastian Siemiatkowski told Reuters. “We at Klarna take a very long-term approach and this investment demonstrates a shared commitment and vision to the continual development of retail over the next years to meet customers changing expectations and preferences.”
Klarna has had a strong year: the company saw 550% growth in the U.S. market in the first six months of 2020, due to the combined increased reliance on online commerce due to the coronavirus pandemic, and consumers looking for more flexible payment options due to financial insecurity (also due to COVID-19). Macy’s chief digital officer Matt Baer said in a statement that the partnership with Klarna will help the retailer “reach wider audiences looking for seamless alternative payment solutions.”
Buy now, pay later technology in general—including Klarna competitors such as SplitIt and Afterpay—has seen a massive spike in popularity this year, with numerous big-name partners and retailers adopting the financing technology. U.S. big-box retailer Target began testing BNPL options with Sezzle last month, while SplitIt has partnered with both Mastercard and Visa to help those brands offer cardholders more flexible financing options. Afterpay, meanwhile, has introduced an in-store platform for BNPL payments through Apple Pay and Google Pay.