Fintech Giants Stripe and Klarna Partner On ‘Buy Now, Pay Later’ As Competition Heats Up

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LONDON, UK Stripe, and Klarna, two of the largest private fintech startups in the world, have teamed together. Stripe announced a strategic relationship with Klarna on Tuesday 26th October 2021, allowing its merchants to use the Swedish company’s purchase now, pay later payment mechanism. We will be a real growth partner for our merchants of all sizes, helping them to optimize their entrepreneurial success through our combined services, said Klarna’s chief technology officer, Koen Koppen.

The partnership will make it easier for shops to add Klarna as a payment option on their website, according to Stripe, which helps businesses take payments online. Klarna usually works directly with retailers to install its checkout button. Klarna’s client base might expand dramatically as a result of the move. Klarna, which was founded in 2005, has lately become one of the most well-known brands in European tech because of a boom in demand for its buy now, pay later (BNPL) service, which allows customers to stretch the cost of their purchases over a period of interest-free payments. The Treasury of the United Kingdom launched a consultation on the regulation last week, requesting public input.

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Stripe’s partnership with Klarna might be a way for the payments behemoth to cash in on a fast-growing trend, while competitors like Square and PayPal make significant pushes in the field. PayPal has its own BNPL service and is buying Japanese rival Paidy for $2.7 billion, while Square just agreed to buy Australia’s Afterpay for $29 billion. Stripe and Klarna announced they were deepening their collaboration in North America as well as abroad. According to the firms, Stripe is now used in around 90% of Klarna’s payment processing volume in the United States and Canada. Stripe is the world’s largest privately-held fintech start-up, according to Insights data. It was last valued at $95 billion. Klarna is the second-largest company in the world, with a market capitalization of nearly $46 billion. In the near future, both firms are likely to go public.

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