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Afterpay, the buy now, pay later option from Block Inc., will soon test a new way to use the payment method at the point of sale with a Visa debit card. Meanwhile, rival BNPL provider Klarna AB is expanding the locations where consumers can use Klarna to make gift card purchases on the Blackhawk Network.
Afterpay, which Block acquired in 2022, says it will begin testing a Visa Debit Flex Card, issued by Sutton Bank and The Bancorp Bank N.A., in coming months to enable eligible Cash App card holders to use the Afterpay BNPL option for in-store or online transactions made with the card. A larger rollout is expected in early 2026, the company says.
Cash App says the card will carry no hidden fees and will feature fraud protection as well as weekly offers. Noting that consumer credit is shifting, Owen Jennings, Block executive officer and head of business, says in a statement, “We’re offering a transparent form of credit and a real alternative for Americans who want flexibility without the traditional baggage often associated with credit cards.”
BNPL transactions are reviewed using Block’s underwriting expertise. Block says it uses near real-time data analysis that can provide insight into risk even for consumers with limited access to traditional credit options or who opt not to use revolving credit. It reviews current financial behavior, such as cash flow, spending habits, savings, and payment consistency to determine eligibility.
In related news, Klarna says U.S. consumers can use its BNPL payment method for purchases made on Giftcards.com, an online store from Blackhawk Network Inc. The two companies first began working together in 2022 to enable Klarna as a payment option at physical retail locations.
Gift card shoppers can choose Klarna’s Pay in Full one-time payment option, its Pay in 4 installment option, or financing for larger gift card purchases.
Klarna also is expanding its in-app gift card mall in the Klarna app into Canada and France, having launched it in the U.S., U.K., Germany, Netherlands, and Italy.
