Klarna Launches New Mobile Phone Service
▼ Summary
– Klarna, a buy-now-pay-later service, is launching a $40/month unlimited 5G phone plan in the US on AT&T’s network as an MVNO.
– MVNOs, like Mint Mobile and Visible, resell phone service on major carriers’ networks, with Klarna joining this competitive space.
– Klarna’s phone service, powered by Gigs, offers no contracts, instant eSIM activation, and sign-up via its app, but no physical SIM support.
– Klarna’s core BNPL service faces scrutiny, with studies showing frequent users have more debt and higher late payment rates.
– Klarna aims to expand beyond BNPL, positioning its app as an AI-driven “digital financial assistant” to help users save on services.
Klarna is expanding beyond its popular buy-now-pay-later services with the launch of a new mobile phone plan in the US. The $40 monthly offering provides unlimited 5G data, calls, and texts, operating on AT&T’s network. This move positions Klarna as another player in the competitive MVNO (mobile virtual network operator) market, joining established brands like Mint Mobile and Visible by Verizon.
The service, set to debut in the coming weeks, is powered by Gigs, a platform designed to simplify MVNO launches for companies. Customers can sign up directly through the Klarna app without contracts or hidden fees. The plan supports instant eSIM activation, allowing users to transfer their existing number or get a new one, though physical SIM cards won’t be available.
Klarna’s core business remains its BNPL model, which splits purchases into four interest-free payments. However, recent studies highlight potential risks for frequent users. A Consumer Financial Protection Bureau report found that BNPL users often carry more debt than non-users, while a LendingTree survey revealed 41% of customers missed payments in the past year. Despite regulatory scrutiny, BNPL providers like Klarna continue expanding into new markets.
The mobile service signals Klarna’s broader ambition to become a digital financial assistant. CEO Sebastian Siemiatkowski emphasized the app’s AI-driven features, which aim to identify overpayments and recommend cost-saving alternatives. While the US waitlist is now open, Klarna plans to roll out the phone service in the UK, Germany, and other regions soon.
This strategic shift reflects Klarna’s effort to diversify its offerings and deepen customer engagement beyond payment solutions. Whether users will embrace it as a one-stop financial hub remains to be seen.
(Source: The Verge)
