FinTech: BNPL Partnerships To The Fore As Holiday Shopping Looms
Department store chains are tying up with Buy-Now-Pay-Later (BNPL) providers, even investing in them.
Macy’s (NYSE: M), the iconic American departmental store, has bought a stake in the Swedish payments group Klarna which is known for its BNPL service. The two companies have also inked a five-year partnership whereby Klarna will make its BNPL offer available to Macy’s online customers. Under the offer, shoppers can choose to pay for their purchases in four interest-free installments. (CNBC)
Klarna – fresh from a massive fundraising
Klarna ranks as the biggest fintech unicorn in Europe, and fourth globally after it raised a mammoth $650 million last month. GIC – Singapore’s sovereign wealth fund – as well as funds and accounts managed by BlackRock (NYSE: BLK) and HMI Capital, Sequoia Capital, Dragoneer, Permira, Commonwealth Bank of Australia (ASX: CBA), Bestseller Group, and Ant Group participated in Klarna’s mega-round.
Macy’s did not disclose the amount of its investment in Klarna. However, the company’s Chief Digital Officer Matt Baer said the long-term arrangement with Klarna would widen Macy’s reach to include customers choosing to pay with convenient, alternative payment methods that also offer financial control.
Companies offering BNPL solutions have benefited from a surge in online shopping following the COVID-19 pandemic.
“Klarna is delighted to partner with Macy’s as the shift to online retail accelerates and the company continues to innovate and enhance its digital offerings to meet evolving consumer expectations, for which smart and flexible payments are essential,” Klarna CEO Sebastian Siemiatkowski said in a statement.
Klarna’s BNPL peers include Afterpay (ASX: APT), PayPal (NASDAQ: PYPL), and Affirm.
Afterpay ties up with Simon
Simon is a real estate investment trust engaged in the ownership of premier shopping, dining, entertainment, and mixed-use destinations, and an S&P 100 company [Simon Property Group (NYSE: SPG)].
Afterpay and Simon announced Tuesday a national collaboration for in-store payment services ahead of the imminent holiday shopping season.
At participating retailers, customers in the U.S. will be able to pay for their in-store purchases in four installment payments, without the need to take out a traditional loan or pay upfront fees or interest. This BNPL service from Afterpay is completely free for consumers who pay on time.
Related Story: Klarna Gains More BNPL Muscle With $650M Mega Round
Image Credit: Flickr
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