The news: Klarna is on the hunt for new product features and expanding into different industries to become more than just a payments company as it feels the financial squeeze on buy now, pay later (BNPL) firms.
Klarna’s diversification drive: Higher interest rates are making it harder for BNPL providers to find funding and make money as already narrow margins get squeezed, and the risk of customers defaulting on payments is on the rise.
Green is also trending: Klarna’s push to build services that complement its core business has led it into sustainability efforts as well.
Our take: Klarna’s diversification efforts make sense, but it may risk spreading itself too thin by aiming for growth in too many areas. Rather than focusing on AI, environmental features, retail, and marketing—among others—it may be better off targeting one or two market segments.
This article originally appeared in Insider Intelligence's Payments Innovation Briefing—a daily recap of top stories reshaping the payments industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.
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