Buy now, pay later (BNPL) firm Klarna is getting into the subscription commerce business.
The Swedish FinTech on Wednesday announced the launch of Klarna Plus, a $7.99 per month program that lets customers in the U.S. avoid service fees, earn rewards points and get discounts from brands like Nike, Macy’s and Instacart.
“Our research indicates that dedicated Klarna users are looking for an enhanced shopping experience through a subscription model,” said Chief Marketing Officer David Sandstrom. “Klarna Plus addresses this demand, allowing us to deepen our engagement with 37 million loyal US consumers, while also further diversifying a portfolio of payment and shopping solutions.”
The company said it is hoping to tap into a global subscription commerce market, which is projected to reach $2.4 trillion in value by 2028. The United States is Klarna’s biggest market, and where the company is considering an initial public offering (IPO), according to comments by CEO Sebastian Siemiatkowski on Tuesday (Jan. 23).
Siemiatkowski noted that since U.S. is Klarna’s largest market by revenue, it is a natural choice for an IPO, and added that the American investor base has a better grasp on FinTech and tech companies, which could potentially foster a more successful listing.
And when announcing a profitable quarter in November, Siemiatkowski attributed that success in part to rising BNPL usage among American consumers.
The United Kingdom and Sweden are also potential options for an IPO, though the CEO reportedly expressed less excitement about these markets.
Meanwhile, PYMNTS recently explored the rise in scheduled subscriptions among consumers, which indicates an increasing embrace of more convenient shopping experiences.
“Broadly, on an industry level, subscription commerce is going to have to continue to proliferate,” Michael Broukhim, co-founder and co-CEO of lifestyle membership FabFitFun, said in an interview with PYMNTS last year, “such that even describing it as a category loses some meaning any more than you’ll talk about retail or stores as a category within retail because stores are so many different manifestations of an experience you can create.”
To meet this growing demand, merchants are investing in subscription-based models and bolstering their online platforms to allow for scheduled subscriptions. By providing this option, retailers have the chance to attract and retain a loyal base of customers and ensure a steady revenue stream.
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