Swedish fintech company Klarna’s latest partnership is with DoorDash. Together, they are rolling out Buy Now, Pay Later (BNPL) options on food deliveries. This collaboration marks a significant step in Klarna’s expansion into everyday spending categories, as noted by David Sykes, Klarna’s chief commercial officer. Through this partnership, DoorDash customers can finance their delivery purchases over a series of monthly payments. It’s a huge win because it directly addresses the price pinching Americans are feeling, particularly as inflation hits food prices.
Rising Consumer Demand and Inflation Concerns
The collaboration could not have come at a more important time. As Pew Research recently reported, 73% of Americans cite inflation as their biggest economic concern, with grocery costs at the forefront. As much as the prices are going up at fast food outlets, Capital One’s Zeta suite finds food delivery appetite is only increasing across the United States. DoorDash experienced outstanding 19% YOY growth in total orders in Q4 2024. At the same time, revenues skyrocketed more than 26% to a whopping $2.3 billion.
Klarna provides a variety of payment methods, like “Pay in full”, “Pay in 4” and “Pay Later.” The “Pay in 4” option allows customers to pay in four interest-free installments, while “Pay Later” lets them defer payments for up to 30 days without incurring interest. These flexible payment methods have been undeniably popular enough to make Klarna a booming cringeworthy spiffy default in how Americans are buying things. The Boom in Black Friday BNPL Over last Black Friday, BNPL adoption increased a staggering 8.8% year over year. It did a staggering $686.3 million, its sales hype permeating to grocery shopping and other categories.
Putting the finishing touches on its portfolio, Klarna had signed an agreement with Walmart earlier this month to offer BNPL services. This partnership with DoorDash is yet another step forward for Klarna as it makes inroads into new categories that are key to everyday life. As consumers increasingly search for more affordable options amid a higher cost of living, Klarna’s BNPL solutions are a real answer to that need.
Author’s Opinion
Klarna’s continued expansion into everyday spending categories is an important move, addressing the financial pressures felt by consumers. The rising cost of living makes BNPL solutions particularly attractive, offering flexibility that meets the needs of those trying to manage their budgets. However, there are concerns about the long-term financial implications of relying on installment payments, especially if not managed responsibly.
Featured image credit: TechCrunch
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