A new era of consumer financing at Walmart

In a strategic move poised to reshape the retail financing landscape, Klarna, the Swedish buy-now-pay-later (BNPL) giant, entered into an exclusive partnership with OnePay to provide installment loans for Walmart shoppers across the United States. This collaboration aims to offer millions of Walmart customers flexible payment options both online and in-store, enhancing their purchasing power and shopping experience, according to Klarna.

The partners explained that under this agreement, Walmart's extensive customer base will have access to OnePay installment loans powered by Klarna, enabling them to finance a wide array of products, including electronics, home and garden items and automotive goods. Once approved, shoppers can select repayment terms ranging from three to 36 months, with the ability to manage their loans seamlessly through the OnePay app. This integration is set to be implemented directly at Walmart's checkout systems later this year, providing a streamlined and user-friendly financing option for consumers, they added.

OnePay: Walmart's Fintech Venture

OnePay, a consumer financial services platform backed by Walmart and venture capital firm Ribbit Capital, was established in 2021 to expand Walmart's footprint in the fintech sector. The platform is already embedded within Walmart's physical and digital channels, offering services such as banking, credit and payments to millions of users, including Walmart's 1.6 million U.S. associates. The partnership with Klarna marks a significant expansion of OnePay's offerings, adding installment loans to its comprehensive suite of financial products.

Sebastian Siemiatkowski, co-founder and CEO of Klarna, expressed enthusiasm about the partnership, stating, "This is a game changer. Millions of people in the U.S. shop at Walmart every day—and now they can shop smarter with OnePay installment loans powered by Klarna." He emphasized that OnePay's choice of Klarna as their exclusive installment loans partner at Walmart in the United States is a significant vote of confidence, aligning with Klarna's goal of being available everywhere for everything.

Omer Ismail, CEO of OnePay, highlighted the importance of providing consumers with simple and convenient access to fair credit at the point of sale, especially for the millions who rely on Walmart for their everyday needs. He remarked, "We’re incredibly excited to partner with Klarna to give consumers easier and more seamless ways to shop with OnePay at Walmart."

Market implications, Klarna's IPO prospects

Klarna noted that this partnership signifies a notable shift in the BNPL market, as Klarna replaces Affirm Holdings as Walmart's exclusive provider of installment loans. Affirm had been Walmart's BNPL partner since 2019, and the transition to Klarna reflects the dynamic and competitive nature of the fintech industry. Following the announcement, Affirm's stock reportedly experienced a significant decline, underscoring the impact of the partnership on the company's market position.

The timing of this collaboration is particularly strategic for Klarna, which recently filed for an initial public offering (IPO) in the United States. The exclusive deal with Walmart is expected to bolster Klarna's valuation and attractiveness to investors, as it demonstrates the company's ability to secure high-profile partnerships and expand its presence in the U.S. market.

Klarna pointed out that the alliance between Klarna, OnePay and Walmart represents a significant advancement in retail financing, offering consumers more flexible payment options and enhancing their overall shopping experience. As the BNPL sector continues to evolve, such partnerships are likely to play a crucial role in shaping the future of consumer finance.

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