What: Walmart has selected Klarna as its exclusive BNPL provider in the U.S., replacing Affirm, while simultaneously expanding its financial services through OnePay integration.

Why it is important: The shift demonstrates the increasing strategic importance of integrated payment solutions in retail, as companies balance consumer convenience with responsible lending practices.

Walmart's strategic partnership with Klarna marks a significant shift in its financial services offering, establishing the Swedish fintech company as its exclusive buy-now-pay-later provider in the United States. This transition from Affirm, which previously represented about 5% of its gross merchandise volume through Walmart, will be facilitated through integration with Walmart-backed OnePay consumer finance app. The new arrangement will offer customers flexible payment options for both online and in-store purchases, with repayment terms ranging from three to 36 months. This development comes at a crucial time for Klarna, which is preparing for an IPO on the New York Stock Exchange, following a significant valuation adjustment from $45.6 billion in 2021 to $6.7 billion in July 2022. The partnership will enhance Walmart's existing financial services portfolio, allowing customers to manage their loans through the OnePay app while maintaining access to banking, credit, and payment products.

IADS Notes: The retail payment landscape has undergone significant transformation over the past year. In September 2024, Klarna's expansion into physical retail stores through Adyen marked a crucial shift in BNPL adoption, followed by their strategic partnership with Apple Pay in October 2024, demonstrating the mainstreaming of flexible payment solutions. This evolution coincided with Walmart's remarkable digital transformation, achieving 72% stock growth and $100 billion in e-commerce revenue by February 2025. However, October 2024 brought increased scrutiny of BNPL services, with problem borrowing growing at twice the industry's rate. The sector's response emerged in November 2024 with Affirm's UK launch, emphasizing responsible lending practices. This context makes Walmart's switch to Klarna particularly significant, representing a strategic realignment in the evolving retail payment ecosystem.

Klarna replaces Affirm as Buy-Now-Pay-Later provider at Walmart