Klarna Offers a Shopping Search App As BNPL Rivalry Grows

Point-of-sale credit providers are looking for an edge as competition in the buy now, pay later business grows hotter by the week. Klarna AB early Wednesday said it has launched its Klarna Shopping Search app.

 The app uses ChatGPT, an AI platform, to assist shoppers in finding current prices, availability, and offers for items they’re searching for, according to Klarna, one of the world’s biggest BNPL platforms. After completing the search, the app can send users directly to merchants’ sites to make a purchase, according to Klarna.

The new service relies on a connection between ChatGPT and a server at Klarna dedicated to product searches. The server, Klarna says, can link the search tool to data the payments company has compiled on some 100 million products and 400 million merchant listings. This data allows consumers to find what they want, while the platform sends them to the merchant to make a purchase, according to Klarna. Merchants are listed according to their relevance to the search.

According to instructions from Klarna, users initiate the search by clicking on “apps” in ChatGPT, then searching for “Klarna Shopping Search.” Users can then start a chat by stating what they’re looking for.

“A consumer who last week would have spent twenty minutes comparing tabs now gets a real answer in one conversation, creating a more seamless experience from idea to purchase,” says David Sykes, Klarna’s chief commercial officer, in a statement. The company adds that the Klarna Shopping Search app is available currently in ChatGPT.

Klarna has grown rapidly in the global BNPL market, with an estimated market share of 35%, according to some sources. It serves some 43 million users in the U.S. market alone, according to industry estimates.

One of Klarna’s biggest rivals, Affirm, said early Wednesday it will offer buy now, pay later capability to customers in the United Kingdom and Canada who book travel with the Royal Caribbean cruise line. The offer follows a similar arrangement for consumers in the U.S. market, which has been renewed.

That renewal with Royal Caribbean comes as travel spending on Affirm increased 29% in the March quarter year-over-year, the company reported.

Yet another buy now, pay later platform, Zip Co Ltd., said Tuesday it will work with InComm Payments to enable consumers to buy gift cards in installments within the Zip app. The move represents a new market for Zip, which claims 4.6 million active users and a merchant base of some 29,000 sellers.

The new initiative relies on consumer expectations that have grown along with BNPL spending, Zip says. “Short-term installment payments have become a mainstream behavior, and our customers tell us they value this flexibility across all areas of their cashflow,” says Jinal Shah, Zip’s chief marketing and customer officer, in a statement.

Some 47% of U.S. consumers have used BNPL services, according to data from Mordor Intelligence.