Banking News

CBA – Klarna tie-up targeting buy-now pay-later market

CBA – Klarna tie-up targeting buy-now pay-later market

(10 August 2019 - Australia) Commonwealth Bank (CBA) announced it has signed an agreement with Swedish online financial services company Klarna to take on buy-now pay-later (BNPL) outfits such as AfterPay and Zip Pay.

Klarna is a leading global payments provider with over 60 million customers across Europe and in the United States, 130,000 merchants and revenue of US$627 million in 2018.

CBA announced that is has invested US$100 million into Klarna Holding AB as part of the group's US$460 million capital raise aimed to support growth in the US where the group is expanding its customer base by six million new consumers per annum.

The Swedish company is famous for its investment relationship with music artist Snoop Dogg, who is part of Klarna's marketing campaign as "Smoooth Dogg."

"We will become Klarna's exclusive partner in Australia and New Zealand and intend to further invest at the parent and local level to support this partnership" CBA stated.

"While this year's headline results were impacted by customer remediation costs, revenue forgone for the benefit of customers and elevated risk and compliance expenses, our core business continued to perform well underpinned by growth in home lending, business lending and deposits. To further strengthen our leadership position in digital, we have continued to invest to bring together the best technology with the best service to deliver exceptional customer experiences” commented CBA CEO Matt Comyn.

"This is a decisive time in the history of retail banking. Finally, transparency, technology and creativity will serve the consumer, and there will be no more room for unimaginative products, non-transparent terms of use or lack of genuine care of one’s customers" said Klarna CEO and co-founder Sebastian Siemiatkowski. "We, all 2500 of us at Klarna, are humbled and honoured, and now also further empowered, to play a role in this improvement of an industry for the benefit of the consumer, worldwide and in the US in particular."

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