Khurana is reportedly selling most of its buy now, pay later (BNPL) loans in the UK.
A deal with American hedge fund Elliott will free up up to $39 billion for new loans, the Financial Times reported on Wednesday (October 16), citing people familiar with the matter. This comes as Klarna prepares to list in the US, where BNPL continues to thrive as a payment option.
Klarna will continue to underwrite loans and provide customer service to borrowers, the report said. The Swedish company is focused on growth in the United States, where it has forged partnerships with companies such as Uber Eats and Apple.
Klarna Chief Financial Officer Niklas Negren told the FT that the deal will help accelerate the company’s global growth.
“By managing our assets efficiently, we can utilize shareholder capital more effectively,” he said.
The report notes that Klarna’s “3 installment” and “30 installment” installment loans make up the majority of the company’s lending in the UK.
The company is aiming for an initial public offering (IPO) next year, and is reportedly seeking a valuation of around $20 billion, with talks with investors about selling shares before going public.
Klarna will go public in a country where BNPL is gaining traction as a preferred payment method. A PYMNTS Intelligence study found that 16% of American consumers are abandoning traditional payment methods in favor of BNPL.
“This trend is particularly pronounced among Millennials, with 39% reporting having used BNPL in the past year,” PYMNTS writes. “The surge in popularity is highlighted by a 28% year-on-year increase in total circulation of BNPL purchases through a single service, demonstrating BNPL’s effectiveness in driving sales.”
A study in another PYMNTS Intelligence report, “Divided and Unconquered: The Disrupting Cloud Installment Landscape for Acquirers and Sellers,” found that 6 out of 10 consumers had purchased an installment plan in the year prior to the study. was using.
There are also signs that debit card-based BNPL services are gaining popularity among bank customers. The PYMNTS Intelligence report, “Debit Cards in Digital Wallets is Growing in Adoption in Various Sectors,” found that consumers who paid with digital wallets paid for 55% of grocery transactions, 52% of retail transactions, 62% of restaurant transactions, We found that 46% of restaurant transactions involved using a saved debit card. of travel transactions.
“Some banks are now offering customers the option to make their debit purchases into buy now, pay later (BNPL) installments, split into up to four equal payments,” PYMNTS wrote last month.
“This is how traditional financial institutions compete with companies like Affirm and Klarna. Even as interest rates begin to retreat from multi-decade highs, budgeting remains top of mind for consumers. It’s a priority.”
More information: BNPL, Buy Now, Pay Later, Elliott Investment Management, Hedge Funds, Initial Public Offerings, Installments, IPO, Klarna, Loans, News, PYMNTS News, Featured Information
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