JPMorgan Adds Buy-Now-Pay-Later Service Klarna to Payments Platform

If you invest your tuppence wisely in the bank, you can spread it across three monthly payments — though your affluence may not expand.

JPMorgan Chase announced it has struck a deal with Swedish buy-now-pay-later startup Klarna to add its BNPL services to JPMorgan’s payments platform. This comes as Klarna is gearing up for a US IPO, and as regulation of the BNPL sector hangs in the balance post-Trump.

Give Them Some Credit

The BNPL industry has been a target for lawmakers and regulators, the more hawkish of whom wish to see BNPL services regulated with the same rigor as the credit card sector. In the UK, which Klarna snubbed as its IPO location, the government outlined rules in October mandating that BNPL companies undertake affordability checks before taking on customers — although Klarna and friends have some wiggle room, as the rules aren’t set to kick in until next year.

In the US, however, the future of BNPL regulation is more ambiguous. The Trump administration, with the help of its slasher-in-chief Elon Musk, just sidelined one of the agencies responsible for regulating consumer financial services, the Consumer Financial Protection Bureau. Acting CFPB chief Russell Vought, who in videos obtained by ProPublica said he wanted to put federal bureaucrats “in trauma” (did someone say “dream boss”?), shuttered the agency’s headquarters on Monday and told staffers to refrain from performing “work tasks.” For JPMorgan, the deal with Klarna also represents something of a change in direction:

• In October last year, JPMorgan Chase banned credit card customers from using their cards to repay BNPL loans from companies including Klarna and Affirm. JPMorgan Chase said in a statement at the time that BNPL services are a “form of credit,” and that the company generally doesn’t allow customers to pay for credit products via their credit cards.
• Last August, Klarna launched its own consumer bank account product to compete with the likes of JPMorgan Chase, even offering interest to EU customers. “We are a bank, so this is the natural evolution,” Klarna CEO Sebastian Siemiatkowski told Bloomberg. “We are moving into a world with increased competitive pressure with retail banking services,” he added. Siemiatkowski also said the company is toying with getting itself a US banking license.

Positive Affirmation: Klarna isn’t the only one playing while the regulators are away. In its most recent quarterly filing earlier this month, popular BNPL platform Affirm reported a 23% increase in its consumer base year-on-year. Revenue, meanwhile, was up 47% over the same period.