Swedish fintech firm Klarna will be the exclusive provider of buy now, pay later loans for Walmart, taking a coveted partnership away from rival Affirm, CNBC has learned.
Klarna, which just disclosed its intention to go public in the U.S., will provide loans to Walmart customers in stores and online through the retailer’s majority-owned fintech startup OnePay, according to people with knowledge of the situation who declined to be identified speaking about the partnership.
OnePay, which updated its brand name from One this month, will handle the user experience via its app, while Klarna will make underwriting decisions for loans ranging from three months to 36 months in length, and with annual interest rates from 10% to 36%, said the people.
The new product will be launched in the coming weeks and will be scaled to all Walmart channels by the holiday season, likely leaving it the retailer’s only buy now, pay later option by year-end.
The move heightens the rivalry between Affirm and Klarna, two of the world’s biggest BNPL players, just as Klarna is set to go public. Although both companies claim to offer a better alternative for borrowers than credit cards, Affirm is more U.S.-centric and has been public since 2021, while Klarna’s network is more global.
Shares of Affirm fell 13% in morning trading Monday.
Deal sweetener
The deal comes at an opportune time for Klarna as it readies one of the year’s most highly anticipated initial public offerings. After a dearth of big tech listings in the U.S. since 2021, the Klarna IPO will be a key test for the industry. The firm’s private market valuation has been a roller coaster: It soared to $46 billion in 2021, then crashed by 85% the next year amid the broader decline of high-flying fintech firms.
CEO Sebastian Siemiatkowski has worked to improve Klarna’s prospects, including touting its use of generative artificial intelligence to slash expenses and headcount. The company returned to profitability…
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