Klarna revealed its latest initiative aimed at its 12 million UK clientele, introducing a fresh cashback program. Klarna, known for its buy now, pay later service enabling customers to spread payments over time, has introduced a new cashback feature allowing users to earn up to 10% cashback on their online purchases through the Klarna app.
Participating retailers in the cashback program include Boots, Expedia, Dyson, Samsung, and Hotels.com, with additional merchants to be added in the future. The cashback is credited within the Klarna app and can be used towards reducing the Klarna balance, withdrawn, or put towards future Klarna purchases.
There are no restrictions on the amount of cashback that can be earned, but inactivity on the account for 90 days may lead to cashback expiration, except for members of the paid Klarna membership program who enjoy cashback with no expiry. David Sandström, Klarna’s chief marketing officer, expressed, “Cashback is another way we’re fulfilling our commitment to enhancing every purchase experience by providing consumers with tangible benefits at their preferred retailers, especially as the busiest shopping season approaches.”
Klarna offers interest-free repayment options on most payment plans like “Pay in 30 days” and “Pay in 3”. However, late payments may incur a fee of £5 for orders over £30 or 25% of the purchase price for orders below £20. Additionally, failing to make payments on time may negatively impact credit reports as information can be shared with credit referencing agencies.
In light of concerns raised by the Financial Conduct Authority (FCA) regarding buy now, pay later products potentially leading customers to unsustainable debts, the FCA has initiated a consultation process. The proposed regulations would necessitate buy now, pay later providers to assess borrowers’ repayment capabilities and offer assistance in case of financial difficulties. Borrowers will also have the option to escalate complaints to the Financial Ombudsman Service. These new rules are expected to be enforced when buy now, pay later falls under the FCA’s jurisdiction in July 2026, giving firms six months to apply for full authorization.