Klarna has introduced a fresh cashback program for its 12 million customers in the UK. Klarna, known for its buy now, pay later service, enables customers to make purchases on credit and pay gradually. The newly launched cashback feature allows users to receive up to 10% cashback on their online purchases made through the Klarna app.
Participating retailers in this cashback program include Boots, Expedia, Dyson, Samsung, and Hotels.com, with more to be added soon. Customers can utilize the cashback within the Klarna app to pay off their Klarna balance, withdraw the funds, or apply them toward future purchases where Klarna is accepted.
There is no cap on the amount of cashback that can be earned; however, if an account remains inactive for 90 days, the cashback may expire, except for members of the paid Klarna membership scheme who enjoy cashback without expiry. David Sandström, Klarna’s chief marketing officer, expressed, “Cashback is another way we’re delivering on our promise to make every purchase smarter. It gives consumers real value back at their favorite retailers, just as the busiest shopping season of the year kicks off.”
Klarna offers interest-free repayment options on most payment plans such as “Pay in 30 days” and “Pay in 3,” but late payments can incur a fee of £5 for orders over £30 or 25% of the purchase price for orders under £20. Additionally, missed payments may be reported to credit agencies, potentially affecting credit reports negatively.
The Financial Conduct Authority (FCA) has initiated a review on buy now, pay later products due to concerns about customers taking on unaffordable debt. Proposed regulations may require providers to assess customers’ repayment capabilities and offer assistance in case of financial distress. Borrowers will have recourse to the Financial Ombudsman Service in case of issues. These regulations are expected to be enforced under the FCA’s jurisdiction by July 2026, giving firms six months to seek full authorization once the regime is in effect.