Klarna Challenges Rewards Card Issuers; Affirm Adds Pacsun to its Merchant Network

Seeking to provide an alternative to rewards credit cards, Klarna AB has expanded its Premium and Max membership programs in the United States. Klarna’s membership program is a monthly fee-based service that offers consumers such rewards as cashback, exclusive deals, and lifestyle rewards, as well as airport lounge access and travel insurance.

Klarna previously rolled out its Core and Plus membership programs, two lower tier rewards programs, in the United Kingdom and the European Union.

The membership program is offered through WebBank, which issues the Klarna Card, a debit card. Consumers enrolling in the Premium program pay $19.99 per month, while Max members pay $44.99 per month.

Premium members can earn more than $3,000 in perks and benefits per year, as well as 1.5% cashback when paying with Klarna balance, an in-app account where consumers can store money for purchases, receive refunds, and earn interest on balances.

Max members can earn more than $5,000 in perks and benefits per year, 2% cashback when using Klarna balance, access travel, rental-car, and cancel-for-any-reason insurance, and have unlimited airport lounge use worldwide.

Klarna developed its membership program in response to the growing popularity of buy now, pay later loans to finance purchases and consumer’s move away from credit card use. A recent survey by market-research firm Morning Consult reveals that 30% of respondents say BNPL is one of their preferred ways to pay. The survey also indicates 11.2% of credit cardholders canceled a credit card in the past 12 months. Among cardholders earning $100,000 or more, 15% have canceled a credit card during that time. Morning Consult surveyed more than 2,000 consumers in October.

“For too long, Americans have been told they need expensive credit cards to access premium rewards,” David Sandström, chief marketing officer for Klarna, says in a statement. “Klarna is challenging that idea. With our new membership program, U.S. consumers can unlock exclusive cashback offers, travel advantages, and lifestyle rewards without using a credit card or need to hit a spending threshold.”

Klarna also launched its Climate Resilience Program, an initiative aimed at using artificial intelligence to address the effects of climate change. The program identifies and supports innovators developing “practical AI solutions for communities most exposed to climate risks” and turning ideas into “scalable tools for adaptation and resilience,” the company says.

In other BNPL news, Affirm Holdings Inc. has signed clothing retailer Pacsun to its merchant network.

To help build brand awareness and loyalty for Affirm, Pacsun is offering consumers a 10% discount if they enter the promo code AFFIRM at checkout with any form of payment when they make a payment from Pacsun’s Holiday Gift Guide. The offer runs through Dec. 18.

Affirm has about 420,000 merchants in its network, including leading brands Amazon.com, Costco Wholesale Corp., StubHub Holdings Inc., and SeatGeek.