Swedish fintech giant Klarna has launched a card that can be used for in-store payments in the UK.
The company on Wednesday announced the launch of the Klarna Card, a Visa card that allows users to delay payment for purchases, both in-store and online.
The card, which will be offered in black or pink, allows consumers to pay up to 30 days after purchase. No interest or late fees will be charged. Additional payment options will be added in the future.
Shoppers will be able to use the card through Apple or Google Pay, or by contactless payment.
Klarna plans to roll out the card gradually, with a view to opening eligibility to all customers by early 2022. It has opened a waiting list for users to sign up to in the meantime. Some 400,000 consumers have already registered.
Read more: Self-driving cars: Calls to blame companies for accidents, not drivers
Borrowers will also have to go through credit checks to be eligible for the card. Customers will need to be over 18, have an income of at least £12,000 and have a “good credit history“.
Eligibility also goes through a soft credit check rather than the extensive research associated with a credit card. Customers must also have at least one purchase paid for through Klarna on time.
The card is already available in Sweden and Germany, where it is now used by more than 800,000 people, according to Klarna.
Alex Marsh, Director of Klarna UK, said, “For online shopping where credit makes sense, Buy Now, Pay Later (BNPL) has become the sustainable alternative with no interest and clear payment schedules. The launch of the Klarna Card in the UK brings these benefits to the offline world, giving consumers BNPL control and transparency for all their in-store purchases.
Like other buy now, pay later companies, Klarna offers a product that spreads the cost of user purchases over a period of monthly installments, usually interest-free. The company makes money by charging a small fee on each transaction to retailers offering its payment method.
Read more: UK-India trade deal could be bigger than US deal
Klarna said the launch is a “major step” to give UK consumers the ability to pay later for purchases anywhere, without the inherent risks of interest and revolving credit.
“Consumers reject credit products that charge double-digit interest rates while allowing repayments to be deferred indefinitely,” Marsh said.
BNPL’s products, however, have also drawn criticism, with consumer body Which? warning earlier this month that stronger guarantees are needed to protect the millions of UK buyers who fail to realize they are going into debt by delaying payments.