Klarna’s move into the card payment sector made headlines last week, as the firm looks set to become a ‘serious challenger to credit cards’ within ecommerce, according to Jamie Lee, Head of Partner Management EMEA, at payment infrastructure company PPRO.

The expansion of Klarna’s offering sees the firm bring the BNPL payment journey to the retail experience as the payment avenue continues to grow at a rapid rate in the digital space.  

Lee commented: “Klarna launching a card is a big deal for the payments sector. From a functionality perspective, BNPL has been considered a serious challenger to credit cards in the e-commerce space for quite some time now. This move is indicative of Klarna being ready to battle credit cards for the physical real estate inside a consumer’s wallet for point of sale traffic as well. It really is another big step in blurring the lines between traditional brick and mortar retail and pure e-commerce, which has been a clear trend that we have seen accelerating over the last few years.

“This should serve as a wakeup call to the established credit card schemes. The old fashioned wallet has been the last fortress for card schemes ever since they became more popular than cash in many of the most important markets in the world. But now, competition is becoming fierce in all segments of the payments market. This ups the stakes for credit cards to innovate even faster than before, in order to stay competitive and relevant in the future.”

A key concern from many corners in terms of Klarna’s growth is affordability and financial responsibility – something that Lee echoed as he underlined the importance of consumer responsibility and ensuring credit checks are sufficient. 

He concluded: “As with all payment methods, it is important that consumers take responsibility to make sure they are spending within their own affordability limits, and carry out sensible checks on the products they are buying and the merchants that they are buying from. 

“But while regulation is expected in the near future, currently, it is mostly up to BNPL providers to have adequate safeguards in place to ensure that consumers do not overextend themselves, and that merchants on their platforms can be trusted.”