Klarna partners with GoCardless to accelerate expansion in the US

By Joy Dumasia

Klarna, a global retail bank, payments, and shopping service, announced that it had chosen GoCardless, a global leader in account-to-account payments, to offer bank debit payments to its over 21 million US customers.

Klarna will use GoCardless for its popular Pay in 4 offerings and its financing solution, creating a more convenient shopping experience for customers. Klarna users can initiate their payments earlier or pay everything at once when choosing Pay in 4. Additionally, Klarna users who choose to pay via Klarna financing can pull funds automatically from their bank account when a payment is due. These debt-free alternatives for purchases reduce the risk of failed or late payments and remove the hassle of entering and updating card details.

This new way of paying taps into the growing trend of US shoppers moving away from traditional forms of credit, with high-interest rates and revolving debt, towards more innovative and sustainable payment methods. Younger consumers, in particular, have lower adoption rates for credit cards: In the US, Gen Z consumers have an average of two credit cards compared to the national average of three, according to Motley Fool.

Koen Köppen, CTO at Klarna, said: “The US is a key market for Klarna, and we continue to see strong growth, doubling our customer base to over 21 million from last year. To continue along that trajectory, we need partners that not only provide our consumers and retailers more choice and control but also offer us cutting-edge technology and best-in-class service. We’re excited to work with GoCardless and leverage its expertise in account-to-account payments as we expand in the US.”

Hiroki Takeuchi, Co-Founder and CEO of GoCardless, added: “We’ve been proud to work with Klarna in the UK since 2018. From the start, it was clear one of our value-adds was our global bank debit network, enabling Klarna to access multiple markets through a single platform. After years of phenomenal growth across the world, we’re thrilled to be Klarna’s bank debit provider as they make further inroads in the US. With card fees rising and the appetite for debt dropping, we predict rapid growth for alternative payment methods. Not only does this include making purchases with Buy Now Pay Later, but it also extends to how shoppers prefer to pay off their balances, namely, through their bank account, whether that’s powered by ACH debit or newer technology like open banking. Over the next few years, we expect account-to-account payments to challenge the dominance of cards as they tap into changing consumer demand and provide merchants significant benefits in terms of cost, conversion and churn.”