The BNPL vendor launched its local shopping app last week, with Klarna reporting it has been downloaded more than 12 million times overseas.
It offers consumer the ability to split transactions into four-payment instalments with any online retailer with no interest or fees when the pay in time. Other providers lack the ubiquity in their coverage – with a number of retailers offering the ability to use one service such as Afterpay or Zip or maybe multiple services together.
Klarna’s app also holds capabilities for users to browse brands, create wish lists, receive price drop notifications, and have access to exclusive deals and discounts from local retailers.
CBA invested $149.3 million (US$100 million) in the fintech last year, having planned to bring it to Australia and New Zealand. The payment brings the bank’s total investment to $448 million ($300 million), increasing CBA’s shareholding in Klarna Group to 5.5 per cent from its initial 1.8 per cent stake.
Under their agreement, CBA and Klarna will jointly fund and have 50:50 ownership rights to Klarna’s Australian and New Zelaand business. CBA has retained a right to partner with Klarna in Indonesia.
Customers of the big four bank in Australia have been able to quickly register with Klarna and connect their banking account, but the service is also available to non-CBA customers.
CBA chief executive Matt Comyn commented the bank’s partnership will further enhance the customer experience in the company’s banking app, as well as address rapidly growing demand for new payment options.
“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,” Mr Comyn said.
Klarna chief executive Sebastian Siemiatkowski said the company believes the future of retail is high tech powering experiences.
“Australian consumers’ expectations are evolving, they demand seamless, intuitive and transparent online shopping services that better meet their daily needs,” Mr Siemiatkowski said.
“Klarna streamlines this experience from browsing to payment at checkout to post-purchase which allows consumers to take control and shop on their terms all from a single app. This partnership with CBA is rooted in a shared obsession on how good digital experiences can truly serve consumers today.”
Klarna was founded in 2005 in Stockholm. It now has more 85 million users and has partnered with 205,000 merchants in North America, the UK and Europe.
As part of its recent $460 million equity raise, the company said it was confirmed as the largest private fintech in Europe and one of the largest fintech enterprises globally.
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
Sarah has a dual bachelor's degree in science and journalism from the University of Queensland.