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Eyewear retailer EZContacts is the latest merchant to add Klarna AB’s buy now, pay later payment option.
Klarna hopes to displace some credit card transactions, saying vision care is a plannable expense where credit cards remain the default payment option. Klarna says EZContacts customers will be able to use its pay in full, pay in 30 days with no interest, pay in four installment payments, or longer-term financing.
EZContacts, founded in 2005, says more than 5 million customers purchased on its e-commerce site. Klarna, also founded in 2005, came to the United States in 2015. It says it has more than 118 million active users globally who make 3.4 million transactions a day. It says it hit the 1 million global merchant mark in March.
BNPL, once a relatively lesser-used payment method in the United States, now is a familiar one. Fintechs, such as Klarna, Afterpay, and Affirm, dominate the installment-payment arena. They are putting marketing dollars into their products, a J.D. Power report from March says.
“Fintechs are promoting their BNPL products much more aggressively [than financial institutions],” Sean Gelles, J.D. Power senior director of payments intelligence, says. “This aligns with their strategy of using the daily engagement of payments to challenge incumbent financial institutions for the primary banking relationship with customers.” The same report says 37% of U.S. consumers made a BNPL transaction within the prior 90 days, a 5% increase from a year earlier.
But some aren’t content to remain solely a BNPL competitor. Klarna, for example, is working to deepen the relationships with its users beyond payments. In March, it said it wants to acquire customers through payments, then extend that relationship into banking services. The number of its banking customers doubled in March over the same month a year prior, Klarna says.
