BNPL provider Klarna has revealed that 96% of BNPL purchases made during the 2023 Black Friday weekend in the US were paid on time or early. Moreover, nearly a third (30%) of US purchases were paid off early, ahead of their due date. That is up from the 24% recorded in 2022.
The figures suggest that Klarna is succeeding in tightening up its underwriting. When it reported losses of over $1bn in fiscal 2022, net credit losses for the year amounted to $545m.
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In 2022, Klarna raised $800m funding, valuing the firm at $6.7bn, down over 80% from its 2021, $45.6bn value. BNPL critics will also continue to highlight the contrast in BNPL write-offs and provisions with credit card issuers.
Klarna US customer numbers rise by 32% to 37 million
Klarna reports a 30% increase in orders placed by US shoppers on Black Friday compared to the year prior. Customer numbers in the US are up 32% y-o-y to 37 million. It says that its fastest-growing age group in the US is individuals over the age of 50.
“This data clearly shows that consumers understand Klarna’s BNPL products. It underscores the growing demand for BNPL services and the effectiveness of our BNPL model. It also demonstrates the financial prudence of our 37 million US consumers who are looking for financial flexibility without compromising their financial health,” said Erin Jaeger, Head of North America.
Klarna contrasts its numbers with the financial strain observed among US credit card users. It says that nearly half (47%) of credit card users anticipate difficulties in settling their holiday credit card debts in full amidst soaring annual percentage rates. Americans currently owe $1.13trn on their credit cards, with balances rising by $50bn in the last quarter of 2023.
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By GlobalData“Klarna’s products are not built on encouraging people to borrow as much as possible at the highest possible rate like credit card providers. When it makes sense to use credit, our interest-free BNPL product, with short-term repayments and no revolving credit, presents a fairer, more sustainable choice. This approach results in our users maintaining an average balance of $150, far below the $6,000 often seen with credit cards,” Jaeger added.
