Stripe partners with BNPL giant Klarna
Stripe, one of the largest payment providers in the world, has announced the launch of a partnership with the BNPL giant Klarna which might prove to be a game-changer as far as the buy-now-pay-later industry is concerned.
Stripe has millions of online businesses onboard and this partnership would mean that these businesses would not be able to offer BNPL options to millions of customers around the world and open up a whole new space for the industry. The BNPL segment has been growing around the world over the last few months with many large companies like Paypal, Klarna, and others competing for market space. But this is likely to be the biggest partnership yet in this space and could make Klarna the undoubted leader in the BNPL industry at least for the time being. It is a win-win situation for both companies as Klarna would be able to get access to a whole new set of companies and businesses to offer this payment option while Stripe would get additional business as the future payments made by the BNPL segment would be routed through its network.
Will Gaybrick, chief product officer, Stripe, said: “Klarna’s payment options are a powerful tool for online businesses to attract more customers, boost conversion rates, increase basket sizes, and thus grow their revenue.”
The increased focus on the BNPL segment from investors and the large companies has placed a lot of pressure on the smaller startups that have been working in this space for the past 2-3 years and they are likely to come under renewed pressure to either seek investment and grow quickly or shut shop which may not be the ideal situation for the BNPL industry. This partnership would be open in 19 countries of Europe and the USA as well which would give massive exposure to a huge number of clients for these companies and they would be hoping that this would help them to dominate the BNPL industry. Critics have been opposing the BNPL industry as they believe that this is likely to tempt the users, especially the younger generation to get used to taking credit even for small purchases and also encourage them to make large purchases which they would normally not do, something similar to what the credit cards did a few decades back. This could lead to bad credit habits in the long term for the users and this is not a good proposition for not only this industry but for the overall financial well-being of the society as well.