By Manya Saini and Supantha Mukherjee (Reuters) -Swedish payments firm Klarna said on Monday it is partnering with consumer finance app OnePay to offer installment loans for purchases at retail giant Walmart in the United States. Installment loans, a staple of consumer lending, offer fixed payments over a set period, making them a popular and […]
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Klarna, OnePay unveil installment loans tie-up for Walmart shoppers in US
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By Manya Saini and Supantha Mukherjee
(Reuters) -Swedish payments firm Klarna said on Monday it is partnering with consumer finance app OnePay to offer installment loans for purchases at retail giant Walmart in the United States.
Installment loans, a staple of consumer lending, offer fixed payments over a set period, making them a popular and often lower-cost alternative to credit cards for big-ticket purchases such as electronics and cars.
Shares of U.S.-based buy now, pay later lender Affirm, which previously held the sought-after partnership, fell 11% following the news.
“Our broader view about these alternative lenders like Affirm is that there’s plenty of share to take from the traditional prime consumer finance companies like the credit cards,” analysts at BTIG wrote in a note.
The brokerage added the loss of the partnership alone, in its view, did not justify the stock’s sharp decline.
“We win business when merchants want superior performance and maximum value, given our underwriting and capital markets advantages,” an Affirm spokesperson said.
“We will continue our long-term strategy of competing on our products and entering into sustainable partnerships.”
Retailers are increasingly partnering with lenders to offer installment financing at checkout, in the hopes of boosting sales by giving consumers more flexible payment options.
Klarna said the exclusive partnership with OnePay will be directly integrated at Walmart checkouts this year. Customers, once approved, can choose repayment terms ranging from 3 to 36 months and manage their loans directly on the OnePay app.
“This is a game changer,” said Sebastian Siemiatkowski, Klarna’s co-founder and CEO. “We look forward to helping redefine checkout at the world’s largest retailer — both online and in stores.”
Buy now, pay later pioneer Klarna is preparing for its long-awaited U.S. stock market debut and while the fintech has yet to reveal terms, it is reportedly aiming to raise over $1 billion at a valuation exceeding $15 billion.
(Reporting by Manya Saini in Bengaluru and Supantha Mukherjee in Stockholm; Editing by Krishna Chandra Eluri)