Klarna has announced it is launching a physical card in the UK through Visa.
The card utilises the company’s buy now, pay later product and lets users defer payments on their purchases both in-store and online.
The Swedish fintech giant already rolled the card out in Germany and Sweden, where it is currently used by over 800,000 people, the company said.The card will initially only give owners the chance to “Pay in 30”, which allows customers the ability to delay paying the item until next month, however it plans to add additional payment options in the future.
In order to make money on each purchase, retailers which offer the payment solution are charged a small fee on each transaction.
The card comes in either black or pink and sends out a push notification to the user’s smartphone when the transaction has been made, similar to other fintech companies such as Monzo.
It will also allow users to extend the due date on their payment by up to 10 days for free.
The rollout of the card will occur gradually, with all customers set to be eligible by early 2022, users can sign up to waiting list in the meantime.
“For online purchases where credit makes sense, buy now pay later has become the sustainable alternative with no interest and clear payment schedules,” Klarna head of UK Alex Marsh said.
“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 believes that its card is a better alternative to traditional credit means as it does not charge interest or late payment fees and will therefore be more consumer interest.
The launch comes at a time of growing regulatory concern surrounding the BNPL industry from the Financial Conduct Authority (FCA).
A similar story is playing out in the US, with the US Consumer Financial Protection Bureau has opened an investigation into popular BNPL solutions from companies including Afterpay, Affirm and PayPal.
Klarna spokesman Daniel Greaves said Britain’s FCA is “fully aware of the product and how it works,” and that the firm received the green light from regulators before launching.
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