Google Pay is giving its users access to new buy now, pay later services, adding Afterpay installment financing to its digital wallet Tuesday and promising the addition of Klarna next year.

Block, the Oakland, California-based parent company of Afterpay, disclosed the digital wallet update in a press release Tuesday. Klarna, its Swedish BNPL competitor, gave the pledge for next year in a separate Tuesday press release as well.

The precise timeline is still to be determined, Klarna spokesperson John Craske said in by email. Afterpay was available on Google Pay as of Tuesday, a Block spokesperson said in by email.

Google Pay users won't be able to use Afterpay everywhere, according to the news releases. The Afterpay option is available at "select merchants," the company’s release said. The Afterpay spokesperson declined to elaborate.

Google Pay users will be able to use Klarna at both integrated and non-integrated merchants, Craske said.

The Block announcement comes shortly after tech giant Apple announced partnerships with the BNPL providers Affirm and Klarna, giving users of the Apple Pay digital wallet access buy now, pay later services at checkout.

Apple announced it was adding Affirm to Apple Pay in September, and said last month that the digital wallet will let users pay with Klarna.

"U.S. customers can now choose Afterpay at checkout in the Google Pay checkout flow," Afterpay’s release said on Tuesday.

Buy now, pay later is an increasingly popular payment option. A Federal Reserve Bank of Boston survey of roughly 4,200 U.S. adults found that 9.3% reported using buy now, pay later in the past month in October 2023, compared to 8% in 2022, and 6.6% in 2021. Figures for 2024 were not available.

"Consumers are increasingly looking for more choice and flexibility when it comes to payment options,” Drew Olson, senior director of engineering at Google Pay, said in the news release.

Klarna’s BNPL option is available at a handful of big name merchants including the pharmacy chain Rite Aid, the shoe company Adidas and the ride-hailing service Uber. The BNPL provider also announced a partnership with Adyen in September.

Afterpay has partnerships with a number of retailers, including some big names like Ikea, Sephora, Nordstrom, Calvin Klein, Best Buy, and Bed Bath and Beyond.

The news comes as consumers gear up for the holiday shopping season, which begins in earnest the day after Thanksgiving, which is on Nov. 28.

By Patrick Cooley on Nov 19, 2024
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