The news: Klarna is now a default payment option for WooCommerce merchants using WooPayments, per a press release.
Previously, merchants had to opt in to offer the buy now, pay later (BNPL) option.
Why this matters: Platform partnerships are a key growth strategy for BNPL providers right now. They solve the pain point of having to negotiate individual partnerships with every merchant, which can be costly and time-consuming.
And Klarna has been pushing this growth avenue: It also became a default payment method on Worldpay in October. This WooCommerce expansion will now bring Klarna to a bevy of new checkout pages—there are more than 4.7 million live stores running on the WooCommerce platform.
Our take: This partnership is a win for Klarna as it preps to go public. But for WooCommerce, the tie-up could have unexpected results.
Not all merchants may want to offer the BNPL option, and now, they no longer have the choice. The transaction cost of accepting a BNPL payment can be more expensive than accepting a card payment, and smaller merchants with tighter margins may not want to accept these higher costs. The tie-up could therefore tarnish some of WooCommerce’s merchant relationships.
This article is part of EMARKETER’s client-only subscription Briefings—daily newsletters authored by industry analysts who are experts in marketing, advertising, media, and tech trends. To help you finish 2024 strong, and start 2025 off on the right foot, articles like this one—delivering the latest news and insights—are completely free through January 31, 2025. If you want to learn how to get insights like these delivered to your inbox every day, and get access to our data-driven forecasts, reports, and industry benchmarks, schedule a demo with our sales team.