Klarna, the prominent buy now, pay later lender, has unveiled a significant expansion for its services in the United Kingdom, announcing its availability as a payment option on Google Pay. This strategic move is set to impact approximately 12 million UK shoppers who utilise Klarna's flexible payment solutions.
Enhanced Payment Flexibility for Consumers
The integration means that shoppers using Google Pay can now seamlessly select Klarna to pay for purchases in instalments directly from their mobile devices. Klarna specialises in offering interest-free repayment plans, including popular options such as "Pay in 30 days" and "Pay in 3," which allow consumers to spread costs without incurring interest charges.
Financial Implications and Credit Considerations
However, users must be aware of potential fees and credit impacts. If a payment is missed, Klarna can impose a late fee of £5 on orders valued at £30 or more, or charge 25% of the purchase price for orders under £20. Importantly, Klarna may share payment information with credit referencing agencies, meaning missed payments could negatively affect an individual's credit report.
On a positive note, timely repayments and moderate use of buy now, pay later services can demonstrate responsible borrowing behaviour, potentially aiding creditworthiness. This dual nature underscores the need for consumer caution and financial management.
Executive Perspectives on the Collaboration
Raji Behal, Head of Western and Southern Europe, UK & Ireland at Klarna, expressed enthusiasm about the partnership, stating, "We’re really excited to bring Klarna’s fair, flexible and interest-free payment options to Google Pay users. This is a big moment for us and a major step towards our goal of being available at every checkout, everywhere."
Lisa Yokoyama, Director of Product Management at Google Pay, highlighted the broader benefits, noting, "Expanding our collaboration with Klarna to the UK underscores our goal to empower more people with the flexibility to pay how they choose. With people shopping on Google over a billion times a day, this broader footprint provides even more checkout options to help businesses drive tangible growth."
Upcoming Regulatory Changes in the BNPL Sector
This development coincides with impending regulation from the Financial Conduct Authority (FCA), set to take effect from July 15, 2026. Under the new rules, buy now, pay later lenders like Klarna will be required to provide clear, upfront details about agreements, including payment schedules, amounts due, and consequences of missed payments.
Additionally, lenders must conduct affordability checks to ensure customers can repay borrowed amounts and offer support, such as signposting to free debt advice, for those facing financial difficulties. Consumers will also gain the right to complain to the Financial Ombudsman Service (FOS) if they feel unfairly treated.
Lenders will need authorisation from the regulator and must adhere to Consumer Duty rules, which establish higher standards of consumer protection across UK financial services. These measures aim to enhance transparency and safeguard users in the rapidly evolving buy now, pay later market.
