With BNPL being widely adopted as an alternative payment option in the US, CellPay has partnered up with Klarna to implement and offer Klarna’s interest-free, Pay in 4 service at checkout. CellPay customers are given the option to choose this payment option and split their payments into four interest-free payments to be carried out over the course of six weeks.
The partnership allows underbanked US citizens, and not only, to pay for prepaid cell phone minutes over a longer period of time, this flexibility enabling them to keep on being connected with their loved ones. The BNPL payment option is an alternative to high-interest credit, giving customers the chance to manage their money and budget in a more flexible way. CellPay customers that choose to use the Klarna service and split the cost of their purchase into four monthly payments will be able to do so without having to ever pay interest.
According to a report by Grand View Research, Inc., the BNPL market size is expected to reach USD 39.41 billion by 2030, registering a compound annual growth rate (CAGR) of 26% from 2022 to 2030, a growth attributed to the high purchasing power that BNPL platforms offer, paired up with the benefit of interest-free and convenient payments.
According to the Consumer Financial Protection Bureau (CFPB), over 40% of Americans have used a BNPL app. A probe announced in December 2021 asked BNPL providers such as Klarna, Affirm, Afterpay to provide insights into the risks and benefits of their products, aiming at translating the received data into a bill to level the playing field between alternative lenders and banks, while diminishing the ecommerce debt brought into the country by BNPL usage.
Klarna’s valuation saw a significant drop of 85% in 2022, as shown by the funding received in July 2022, an USD 800 million funding from investors at a USD 6.7 billion valuation, down from the USD 45.6 billion valuation it had in June 2021. The newly received investment was announced to be targeting the company’s expansion into the US, where they had previously launched several products such as digital wallets for loyalty cards and alternative cards in June 2022, and a Virtual Shopping tool, which was launched in May 2022.
For more information on the Buy Now, Pay Later (BNPL) market developments in 2022, as well as other payment methods, download The Paypers’ Payment Methods Report 2022.
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