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Swedish fintech company Klarna has launched its ‘buy now, pay later’ service in Ireland today. Consumers can now pay in three interest-free installments at online retailers across the country. This expansion follows other news around Klarna, such as the company becoming the leading provider in its market.
Klarna is now active in Ireland, which enables consumers to pay in 3 interest-free installments at any online store, whether they are a Klarna retailer or not. “Ireland is a really exciting market for us, as people turn away from credit cards. As the older-style financial institutions exit the market we’re here to create more competition, which is in the best interest of the consumer”, said Sebastian Siemiatkowski, CEO of Klarna.
The expansion follows a previous expansion in Poland, a new partnership with Stripe and the launch of a new one-stop shopping app. The company is now active in 17 markets and was valued at around 8.9 billion euros in 2020, making it the largest fintech unicorn in Europe.
Over 50% of global BNPL market
Klarna has not just grown geographically, it has now also overtaken competitors and established itself as the leading ‘buy now, pay later’ (BNPL) provider. According to data presented by HelpCenter, Klarna takes a 53 percent share of the market. This is higher than its competitors Afterpay, Sezzle, ZipPay and Affirm combined, with a total share of 39 percent.
Out of all websites offering Klarna as a payment method, 34% are from Germany.
Out of all websites offering Klarna as a payment method, a majority of 34 percent are from Germany. Up to 31 percent are from the US, while Klarna’s home market Sweden accounts for 12 percent. These are followed by the UK (8 percent) and the Netherlands (5 percent). Klarna’s activity in 12 other markets make up a combined total of 10 percent.
Klarna’s growth and the popularity of BNPL across consumers has raised regulatory concerns. A recent study revealed that 36 percent of Gen-Z used BNPL in 2021, which is a six-fold growth since 2019. Critics are concerned that younger people are more vulnerable for potential debt.
It’s illegal to offer BNPL before other payment options in Sweden.
In Klarna’s home market, it’s been illegal since 2020 to offer BNPL before other payment options. And in December, the UK’s Advertising Authority banned some of Klarna’s ads. The company, however, argued that credit card companies are worse. Klarna offers interest-free installments, while banks use high interest rates.
While Klarna has been growing exponentially in the last couple of years, more regulations and growing consumer debt is likely to make it harder for the company to scale in the future. For now, the company is preparing for an IPO.
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