Klarna, the AI-powered global payments provider, has announced a partnership with UATP, a global payment network that simplifies payment processes for businesses. The collaboration allows airlines to provide Klarna's flexible payment services, which include interest-free Buy Now Pay Later (BNPL) options, to their travel consumers, thereby increasing their payment flexibility. The air travel industry, which is valued at $1 trillion, is a substantial development area for Klarna, as 70% of retail travel payments are made using credit cards. This leads to significant expenses for airlines, which incur $20 billion in annual payment processing expenses, as well as substantial interest payments for consumers. Klarna has observed a 50% increase in the total value of travel purchased through its platform over the past year, indicating a surge in consumer adoption in the travel sector.
UATP's integration of Klarna enhances its support for BNPL solutions, enabling merchants to access a burgeoning global BNPL market that is expected to reach $60.47 billion by 2030. “BNPL is an essential payment option for travel merchants to provide their customers. It offers flexibility and convenience to encourage travelers to complete transactions and boost conversion rates,” stated Zach Ornelas, SVP of Global Sales for UATP. The partnership enables airlines to introduce Klarna's BNPL options more efficiently by leveraging UATP's network, thereby reducing implementation costs and improving transaction flexibility for travelers.
