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Klarna also just achieved its first quarterly profit since 2019 in its Q3 2023 earnings (ending September 30). This positions both companies for strong financial health moving forward. In the future, Affirm plans to reinvest some of its profits into growth initiatives. What鈥檚 next? Affirm hopes its growth will continue during the holiday season.

Fintechs like Klarna and Afterpay and incumbents entering the market have made it harder for BNPL providers to stand out. But Affirm is still increasing its volume and can benefit from market growth: By 2026, 38.9% of US internet users will use a BNPL solution, up from 30.7% in 2022, per Insider Intelligence forecasts. What next?

This helps lenders grow in the embedded finance space without giving up their own branding, which remains visible to customers, such as when Klarna, Afterpay, and Mastercard display their logos to consumers buying products online. Banks and fintechs can also share data on users and their behavior, letting them create a more personalized customer experience.

Providers like Afterpay and Klarna ramped up their shopping features ahead of the holidays to capitalize on this spend, and so far, these efforts have paid off. BNPL transactions through Afterpay increased 19% YoY this weekend, per a press release. A lot of this activity took place directly in the Afterpay app: usage was up 16% from last year.

Klarna. Portent. SaleCycle. Sapio Research. Scanbot. Sensor Tower. YouGov.

Klarna is pushing further into in-store BNPL services, giving advertisers a chance to reach consumers in-store as well as online. This was originally featured in the Retail Daily newsletter. For more retail insights, statistics, and trends, subscribe here.

The Consumer Financial Protection Bureau (CFPB) is investigating five major BNPL providers鈥擜ffirm, Afterpay, Klarna, PayPal, and Zip鈥攖o determine whether it should regulate BNPL more strictly. The consumer watchdog has yet to publish any rules or recommendations for BNPL providers but could crack down soon.

Blackhawk also partnered with Klarna to lean into Gen Z鈥檚 love of BNPL. 4. Digital wallets and rewards points will also be key payment methods for holiday purchases. Almost 30% of consumers plan to use PayPal for holiday shopping, and about 15% plan to use Apple Pay, per i2c and PYMNTS.

Klarna. TechTarget.

In fact, Klarna, Zip, and Amount already offer virtual cards鈥攁nd more BNPL fintechs will follow their lead. Further, BNPL providers can collect a portion of the interchange fees from both types of card transactions, which incentivizes them to pursue these payment options. Consumer interest is expanding beyond younger generations.

What this means for Marqeta: Marqeta has a large presence in the BNPL space; it powers virtual cards and other payment solutions for Klarna, Zip, and Amount. And BNPL is 鈥渟till growing very fast,鈥� CFO Mike Milotich said during Marqeta鈥檚 Q2 2022 earnings call, following extraordinary growth at the height of the pandemic.

To appeal to younger consumers, BNPL providers like Klarna are adding features like shoppable videos and an AI-powered shopping lens, which allows shoppers to take a picture of items in their surroundings and instantly find out where to buy them in the Klarna app. 4. AI plays a (small) role in holiday shopping. The stat: 44% of consumers will use AI in their holiday planning, per 84.51掳.

Affirm鈥檚 Debit+ card has experimented with rewards points, and Klarna also has a rewards club. But they don鈥檛 stack up to credit card programs, where 3% cash back is fast becoming de rigueur. What鈥檚 the answer? BNPL firms can鈥檛 stand up to credit card reward schemes on their own. Instead, they鈥檙e going to need to tap their extensive merchant networks and partner on BNPL-exclusive rewards and offers.

Sweden鈥檚 payments firm Klarna is valued at $6.7 billion down from $46 billion in June 2021. London-based virtual conference platform Hopin just laid off 29% of its staff. Berlin鈥檚 rapid grocery delivery startup Gorillas laid off 300 employees and is 鈥渂urning a lot of cash鈥� as a valuation hit looms.

In 2023, more providers could roll out programs like Klarna鈥檚 rewards club, which lets customers earn points simultaneously with Klarna and with retailers鈥� own programs. Read the full report.

Klarna. Marqeta. Nationwide. Opinium. PayPal. Transact Payments. UK Finance. Which? YouGov.

Amazon, Walmart, Google, and Klarna lean into generative AI. Amazon turns to generative AI to improve the search experience. Methodology: Data is from a November 2023 SurveyMonkey survey. 1,096 US adults ages 18+ were surveyed online during October 30, 2023.

Why Klarna is making an omnichannel push ahead of the holidays. How Walmart, Trader Joe鈥檚, and Target boost holiday impulse purchases.

Instacart, Klarna, Shopify deepen ties with ChatGPT. Yesterday鈥檚 Chart of the Day: Funnel vision. Methodology: Estimates are based on the analysis of data from other research firms and government agencies, historical trends, reported and estimated revenues of major online retailers, consumer online buying trends, and macro-level economic conditions.

BNPL providers like Affirm and Klarna, which are already popular with Gen Z, have also launched debit cards to capture more spending volume.

The sample sizes are nationally representative, naturally including both Klarna users and non-Klarna users.

More Chart of the Day:. 8/24 - The rise and fall of ecommerce growth. 8/23 - Programmatic OOH watch. 8/22 - Gen Z鈥檚 social motivators. 8/21 - Buying into Klarna. 8/18 - Agencies in review.

Instacart, Klarna, Shopify deepen ties with ChatGPT. 7 tips for using ChatGPT to enhance SEO (without replacing people). Yesterday鈥檚 Chart of the Day: Rebound in aisle 5.

Klarna. Mastercard. McKinsey & Company. Meta. Nepa. Sitecore. Stackla. TikTok. We Are Social. Wunderman Thompson. YouGov.

Why Klarna is making an omnichannel push ahead of the holidays. Early sales, BNPL use will help drive robust holiday spending growth this year. Cost concerns are top of mind for this year鈥檚 holiday shoppers. Methodology: Data is from a September 2023 Morning Consult survey as cited in company blog. 2,223 US adults ages 18+ were surveyed online during August 31-September 3, 2023.