Swedish buy now pay later available on all online retailers launches down under

Swedish buy now pay later service Klarna launched in Australia on Thursday, enabling customers to buy from any online retailer, pay in four equal instalments without interest and fees.

The offer, which is backed by the Commonwealth Bank, will also let CBA customers link their accounts to enable use of the service in a few steps. 

“Australian consumers’ expectations are evolving, they demand seamless, intuitive and transparent online shopping services that better meet their daily needs,” Klarna chief executive officer Sebastian Siemiatkowski said.

“This partnership with CBA is rooted in a shared obsession on how good digital experiences can truly serve consumers today. We believe the future of retail is high tech powering high touch experiences, so regardless of how and when customers want to shop and pay, we need to be there for them.”

Eligible customers will be able to download the Klarna app, and subsequently create a single-use, prepaid ‘Ghost card’ which will be filled with a dollar amount specified and then used to complete a purchase.

According to the business, it is currently used by more than 85 million users, and is partnered with more than 205,000 merchants, across North America, the UK and Europe – such H&M, Adidas, IKEA, ASOS, Boohoo, Ticketmaster, and more. 

“We are excited to be partnering with Klarna to bring their innovative payments technology and integrated shopping experience to the Australian market,” said Commonwealth Bank  chief executive officer Matt Comyn.

“Together with our market leading digital technology, merchant relationships and strong customer network, we will deliver a range of innovative new services to benefit Australian consumers and merchants.”

Industry to act on senate suggestions

Yesterday, buy now pay later providers Afterpay, Zip, Latitude and Openpay committed to consumers safeguards, spurred on by a senate enquiry last year.

According to the ABC, Australian financial industry association chief executive Diane Tate said the sector wanted to protect its customers and eliminate irresponsible practices. 

“We have heard criticisms that young people could lose control of their spending, so the code includes a clause which says buy now pay later products won’t be available to people under 18,” Tate said.

“There is another area of concern, which is about people getting over-committed, [so we’re] doing upfront assessment to make sure the customers are suitable for the product. And another area which is really important in this code also is putting in a cap on late fees.”

It isn’t clear if Klarna is set to join the AFIA.

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