Klarna Brings Pay Later Options to UK Google Pay Users

With this offering, Google Pay users in the U.K. have the choice of using Klarna’s interest-free payment options at checkout, the Swedish FinTech announced Monday (Feb. 16). The offering lets these users access Klarna’s “pay-in-3” installment option, and manage their purchases, returns and repayments from within the company app.

“This is a big moment for us and a major step towards our goal of being available at every checkout, everywhere,” Raji Behal, head of western and southern Europe, U.K. and Ireland for Klarna, said in a news release. “Together with Google, we’re making it easier than ever for millions of shoppers to choose Klarna and pay in a smarter, more transparent way — all from their phone.”

“Expanding our collaboration with Klarna to the U.K. underscores our goal to empower more people with the flexibility to pay how they choose,” added Lisa Yokoyama, director of product management at Google Pay. “With people shopping on Google over a billion times a day, this broader footprint provides even more checkout options to help businesses drive tangible growth.”

The partnership comes days after the U.K.’s financial regulator announced new protections for consumers using buy now, pay later (BNPL) services such as Klarna’s.

Under these guidelines, lenders must be authorized by the Financial Conduct Authority (FCA)  to offer BNPL loans, and must conduct checks to make sure customers can afford to repay their loans before offering BNPL as an option.

“We want the buy now, pay later sector to thrive,” FCA Deputy Chief Executive Sarah Pritchard said in a news release. “It provides an important source of credit to many, and we will continue to support firms who want to develop innovative new products. But crucially, no one should be lent to if they’re unable to repay because that could worsen their financial situation. Now parliament has given us the powers, we’re putting in place proportionate protections for the 11 million people who use it.”

Meanwhile, research by PYMNTS Intelligence has found that BNPL has gone from a “checkout convenience for sneakers and sofas” to a way to cover everything from utility bills to subscription renewals. It’s a change that comes with financial consequences for consumers.

“Users who apply BNPL to essential or recurring expenses are more likely to pay interest than those who confine it to discretionary categories, reflecting both the frequency of these transactions and their role in managing cash flow between paychecks,” PYMNTS wrote last week. “For many households, paying over time has become less about indulgence and more about maintaining day-to-day stability.”