Having established itself as a major player in online pay-over-time company, Klarna is turning its attention to brick-and-mortar retail. The company’s buy now, pay later service is now available at Lululemon’s physical stores across Germany and the UK.
The rollout comes through Klarna’s partnership with payments platform Adyen. Customers can scan a QR code with their smartphone and complete payment through the Klarna app. They can then choose to split their purchase into three interest-free installments or defer payment for a month.
Klarna says the QR code-based process eliminates the need for a separate application form or physical card. It also requires no additional hardware, as Lululemon stores already use Adyen’s payment infrastructure.
Klarna and Lululemon have offered BNPL options through online channels for more than five years, but the companies are now looking expand beyond e-commerce. Klarna cited estimates that global annual spending in physical retail is around $28 trillion, nearly four times the size of online retail spending.
A Simpler Process
The move could represent a broader shift for the BNPL industry as providers look for ways to integrate installment payments into in-store applications. Klarna said the approach could serve as a model for other apparel retailers, especially those already processing payments through Adyen.
“The in-store payment experience with most BNPL vendors is pretty clunky, which necessitated the need to for many to issue debit card products and partner with digital wallets such as Affirm and Apple Pay to make spending a bit easier,” said Ben Danner, Senior Analyst, Debit at Javelin Strategy & Research. “The ability to pay through an app with a QR code is a great development to see from a user experience perspective. I am curious to see if Adyen and Klarna roll this out in more stores.”
Taking to the Skies
The Lululemon rollout is not Klarna’s only expansion into new sectors. Earlier this month, the company announced a partnership with Southwest Airlines that will bring flexible payment options to the airline’s checkout process later this year.
Southwest has historically taken a different approach from many major U.S. airlines, including maintaining its own distribution channels rather than listing flights on third-party sites until recently. Through the partnership, Klarna will provide payment flexibility directly during the booking process.
Travel is one category where installment options may have particular appeal given the higher costs of many purchases. More than a quarter of Americans say they would be more likely to book travel if flexible payment options were available.
