BNPL firm Klarna has partnered with CarTrawler to allow customers to make instalment-based payments on car rentals.
Klarna will provide CarTrawler with its full range of flexible payment options to the latter’s customer base that they can use to book car rentals, as well as on over 70 airlines and 250 travel websites.
Through the agreement, Klarna is currently live on 25 airline websites across 15 countries, including Vueling, TAP Air Portugal, and Eurowings, with the two companies working together to launch on further websites in the near future.
“We are super excited to bring our fair payment methods to travellers across Europe with this CarTrawler agreement,” says Raji Behal, Head of Western and Southern Europe, UK & Ireland at Klarna.
“Providing consumers with flexible payment options and the opportunity to spread the cost of larger purchases like car rental has never been more important.”
A total of $122bn was spent on car rentals globally in 2022, a figure that is growing at over 7% a year. Historically, most of that has been spent using a credit card but this new agreement aims to give consumers a fairer way to access credit for car rental.
Klarna’s BNPL products are built to prevent people from building up large outstanding balances, as the company only lends to those who can afford to repay by conducting strict eligibility checks on every transaction.
This gives a real-time view of a consumer’s financial circumstances, unlike credit cards. When a customer misses a payment, Klarna will automatically restrict access to credit services to prevent debt building up.
CEO of CarTrawler, Peter O’Donovan, added: “Consumer demand for innovative, flexible payment options continues to grow, and our partnership with Klarna, a highly responsible BNPL provider enables our partners to offer their customers more choice and budget control for car rental and airport transfers.
“This new initiative is in direct response to the insight we have gathered across our global travel network for changing preferences in the market, and we’re delighted to continue to evolve our business in line with what customers want and need.
“For our airline and travel partners, more flexibility in consumer choice can support more opportunities to drive ancillary revenue growth.”