Klarna expands US A2A payments with GoCardless

Klarna has partnered with GoCardless, a specialist in account-to-account (A2A) payments, to expand its growth in the US.

In a bid to allow its US customers to utilise bank debit payments, the collaboration sees Klarna use GoCardless’s ‘Pay in 4’ feature as well as its financing solution to create a more ‘convenient’ spending experience.

Koen Köppen, CTO at Klarna, commented: “The US is a key market for Klarna and we continue to see strong growth, doubling our customer base to over 21 million from last year. 

“To continue along that trajectory we need partners that not only provide our consumers and retailers more choice and control but also offer us cutting-edge technology and best-in-class service. We’re excited to work with GoCardless and leverage its expertise in account-to-account payments as we expand in the US.”

After working with GoCardless in the UK since 2018, the new deal allows Klarna Finance users to give permission to get funds automatically from their bank account when a payment is due – helping to reduce the risk of failed or late payments.

This also removes the need of entering and updating card details, and Hiroki Takeuchi, Co-Founder, and CEO of GoCardless, noted on the addition: “From the start, it was clear one of our value-adds was our global bank debit network, enabling Klarna to access multiple markets through a single platform. 

“After years of phenomenal growth across the world, we’re thrilled to be Klarna’s bank debit provider as they make further inroads in the US.  With card fees rising and the appetite for debt dropping, we predict rapid growth for alternative payment methods

“Not only does this include making purchases with Buy Now Pay Later, it also extends to how shoppers prefer to pay off their balances — namely, through their bank account, whether that’s powered by ACH debit or newer technology like open banking. 

This announcement builds on GoCardless’ presence in the US and since 2019, the company has opened a second office in New York City to act as what has been described as a ‘hub for strengthening and scaling the payment infrastructure’ in the the country, as it claims that this will continue to be a focus area.

“Over the next few years we expect account-to-account payments to challenge the dominance of cards as they tap into changing consumer demand and provide merchants significant benefits in terms of cost, conversion and churn,” Takeuchi concluded.