In a strategic move to establish a firm foothold in the ever-expanding travel sector, Klarna, the AI-powered payments network and shopping assistant fintech giant, has forged a groundbreaking partnership with Cathay Pacific. This collaboration aims to provide fair and flexible payment options to travellers across six European countries, namely the UK, Spain, France, Italy, the Netherlands, and Germany.
At the heart of this partnership is Klarna's commitment to offering a seamless payment experience at the point of checkout for Cathay Pacific customers. In a bid to cater to diverse preferences, the company provides a range of payment options. For German travellers, the fintech company enables the option to spread the cost of flights over a period ranging from six to 24 months, albeit with interest. Meanwhile, customers in other countries can leverage the company's Pay in 3 services, allowing them to pay for their flights in three interest-free instalments.
Raji Behal, Head of Western and Southern Europe at Klarna, expressed enthusiasm about the collaboration, emphasising the shift away from high-cost credit cards. Behal noted that consumers of all ages are increasingly inclined towards managing larger payments through no-interest Buy Now Pay Later (BNPL) options or longer-term scheduled payments, providing them with greater control over their spending. As travel rebounds, Cathay Pacific is positioned as a trailblazer in the airline industry, embracing BNPL alongside other high-service travel brands like Airbnb.
According to McKinsey & Co., credit cards presently account for 70% of the $1 trillion spent on flights annually. Klarna's credit products, characterised by transparent repayment plans and customer-protection features, including freezing access to services in case of missed payments, are viewed as a fairer alternative for consumers seeking access to credit.
Paul Johannes, VP Customer Travel and Lifestyle Europe at Cathay Pacific, underscored the airline's commitment to providing passengers with an exceptional end-to-end service. He emphasised that, “Our partnership with Klarna allows us to provide customers with quick, flexible and convenient online payment options so everyone can enjoy travel to the Asia-Pacific region.”
This collaboration with Cathay Pacific is just one of the strategic moves to expand its presence in the travel sector. The fintech giant has also announced a partnership with Airbnb, allowing customers in seven countries to spread the cost of their trips globally. Klarna's ambitious plans include extending this scheme across three continents by 2024, reinforcing its position as a transformative force in the intersection of finance and travel.