The global payments and shopping provider, Klarna, has officially launched in Australia through a new partnership with the Commonwealth Bank of Australia (CBA).
The Klarna Shopping app enables consumers to shop and pay with Klarna at any online retailer, providing users with the option of paying in four equal instalments (at no cost, should they pay in time).
CBA customers can also access Klarna though the CommBank app, which will also detail any items purchased and provide bank customers with notifications about price drops or stock notifications.
Klarna is thought to be the largest private fintech in Europe and one of the largest in the world, with more than 85 million customers using the service to purchase goods and services from 200,000 merchants.
Speaking of the launch into Australia with CBA, Klarna CEO Sebastian Siemiatkowski commented: “This is an exciting day for Klarna, CBA and Australia as a whole.
“We have already developed a strong working relationship with CBA, and we look forward to providing even more opportunism together for our customers in the coming months and years,” he said.
The Klarna CEO added: “This partnership with CBA is rooted in a shared obsession on how good digital experiences can truly serve consumers today. We believe the future of retail is high tech powering high-touch experiences, so regardless of how and when consumers want to shop and pay, we need to be there for them.”
Likewise, CBA CEO Matt Comyn said: “Our partnership with Klarna will further enhance the customer experience in our leading banking app and address the rapidly growing demand among consumers for new payment options.
“By partnering with Klarna, we are bringing together our market-leading digital technology, merchant relationships and strong customer network with Klarna’s innovative payments technology and integrated shopping experience for the benefit of CBA customers and many more Australian consumers.”
CBA triples investment in Klarna
The major bank also announced that has invested a further US$200 million ($297 million) in Klarna Group (at the same valuation) after an initial investment of US$100 million ($148.3 million) last year, in order to “increase strategic alignment, bring additional rights and gain exposure to Klarna’s international growth”.
The US$300 million total investment brings CBA’s shareholding in Klarna Group to 5.5 per cent, up from its initial 1.8 per cent stake.
CBA and Klarna will jointly fund and have 50:50 ownership rights to Klarna’s Australian and New Zealand business.
The bank also retains a right to partner with Klarna in Indonesia.
In its 2019 annual report of its results in August last year, the major bank had announced it had committed an investment of US$100 million into Klarna Holding as part of their US$460 million capital raise.
“The group will become Klarna’s exclusive partner in Australia and New Zealand and intends to further invest at the parent and local level to support this partnership,” the major bank had said.
[Related: Apple Pay arrives for Westpac subsidiaries]
Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.
Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.