Google Pay is expanding its payment capabilities by seamlessly integrating services from Afterpay and Klarna into its versatile platform. Now, users shopping online through Google Pay can take advantage of Afterpay, a feature that will gradually roll out to an increasing number of retailers. Customers in the U.S. will also have the opportunity to utilize Klarna’s interest-free payment plans for their purchases, provided they are $35 or more. Afterpay BNPL on Google Pay will enhance the shopping experience for Google Pay users, offering them increased flexibility and a wider array of choices during the checkout process.
In addition, Google Pay will introduce financing options accompanied by annual percentage rates (APRs), enabling users to choose payment methods that better suit their financial needs. With the Klarna app at their fingertips, customers will benefit from a streamlined experience where they can easily track their deliveries, manage returns, and oversee their payments—all from a convenient location.
Key Takeaways
- Enhanced Payment Flexibility: The integration of Afterpay’s BNPL services with Google Pay allows U.S. consumers to make purchases at select online merchants and pay in installments, offering a more flexible payment option for holiday shopping.
- Strategic Expansion for Google Pay: By adding Afterpay to its platform, Google Pay expands its payment options, catering to consumer demand for more versatile financial solutions, especially for larger purchases that can be paid over time.
- Consumer Budget Management: Afterpay’s BNPL service helps consumers manage their budgets by splitting purchases into smaller, manageable payments without interest, provided payments are made on time. This is particularly useful during peak shopping seasons like the holidays.
- Merchant Benefits and Growth: Merchants offering Afterpay through Google Pay can attract new customers, increase transaction volumes, and encourage repeat business. The integration helps businesses expand their customer base and improve retention through flexible payment options.
Afterpay BNPL on Google Pay: Google Pay Expands Payment Options with Buy Now, Pay Later Integration
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Integrating Afterpay’s Buy Now, Pay Later (BNPL) services with Google Pay marks a significant enhancement in digital payment flexibility and choice, particularly timed with the holiday shopping season. This feature enables U.S. consumers to use Afterpay at select online merchants directly through the Google Pay platform, facilitating purchases that can be paid in installments​.
Google Pay’s adoption of Afterpay’s services is a strategic expansion of its payment options, aligning with consumer demands for more versatile payment solutions. The service is designed to make online shopping more accessible and manageable by allowing users to defer payments without interest, appealing especially to those who prefer to spread out the cost of large purchases over time​.
Drew Olson, Senior Director of Google Pay, noted that Google processes over a billion shopping transactions daily, and there is a growing demand among consumers for varied and flexible payment methods. By collaborating with pay-over-time services such as Afterpay, they are enhancing the checkout experience for Google Pay users by offering additional payment choices and supplying merchants with new growth opportunities.
Consumers benefit from Afterpay’s BNPL feature by gaining the ability to manage their budgets more effectively during significant shopping periods, such as the holidays. The service offers payment plans that split the total cost of purchases into smaller, more manageable parts without additional fees if payments are made on time. This option is particularly appealing as it does not require upfront full payments and is reported to help consumers extend their shopping budgets further​.
Merchants offering Afterpay through Google Pay will likely see advantages such as increased customer acquisition and retention, given that 24 million people use Afterpay and 85 million Klarna. The flexibility of BNPL options can attract a broader customer base, encourage larger basket sizes, and promote repeat business. Afterpay’s data suggests significant merchant benefits, including increased transaction volumes and customer loyalty​.
Tanuj Parikh, head of Global Partnerships at Afterpay, stated that the timing for integrating Afterpay with Google Pay aligns well with the increasing adoption of BNPL options, mobile commerce, and digital wallets by younger shoppers. They are eager to extend their BNPL services to Google’s network to enhance the shopping experience for these consumers, aiming to fulfill their specific requirements.
Sebastian Siemiatkowski, CEO of Klarna, remarked that this development continuously advances them toward their goal of making Klarna accessible at all checkouts for every transaction. In collaboration with Google, they are simplifying the process for millions of customers to select Klarna, offering a clearer and more intelligent payment option readily available to them.
Google Pay’s integration with Afterpay, along with its future plans to incorporate more BNPL services like Klarna, strengthens its competitive position in the digital payments market. This move is not just about offering an additional payment option; it’s about enhancing the user experience and meeting evolving consumer preferences. The strategy behind adding diverse BNPL options like Afterpay and Klarna is to cater to a generation that favors digital solutions and values flexibility in financial management​.
This update follows approximately one year after Google announced partnerships with Zip and Affirm, adding more BNPL choices to its Google Pay service. Although providing four BNPL options at online checkouts might seem extensive, not all retailers provide each BNPL service. The specific agreements between Google Pay, BNPL providers, and the merchants themselves determine the availability of these options.
The announcement followed closely after Apple revealed collaborations with BNPL providers Affirm and Klarna, allowing Apple Pay users to access buy now, pay later options at checkout. Apple included Affirm in Apple Pay as of September and announced last month that users could also make payments with Klarna through the digital wallet.
Buy now, pay later services are gaining traction. According to a survey conducted by the Federal Reserve Bank of Boston, which involved about 4,200 U.S. adults, 9.3% reported using buy now, pay later services in October 2023, an increase from 8% in 2022 and 6.6% in 2021. Data for 2024 were not reported.
Major retailers, including Rite Aid, Adidas, and Uber, use Klarna’s BNPL service. In September, Klarna also entered into a partnership with Adyen. Afterpay is partnered with various retailers: Sephora, Ikea, Calvin Klein, Nordstrom, Bed Bath and Beyond, and Best Buy.
Conclusion
Integrating Afterpay and Klarna’s BNPL services into Google Pay reflects a trend toward flexible payment options, providing users with more online shopping choices. This strategic move enhances the payment experience and aligns with the rising consumer demand for convenient financial solutions, particularly around large purchases and holiday shopping. By offering interest-free payment plans and financing options, Google Pay aims to make online shopping more accessible and manageable for a broader audience, including younger, tech-savvy shoppers who prefer to spread out payments over time.
For consumers, these BNPL options allow for better budget management, especially during peak shopping seasons. For merchants, offering Afterpay and Klarna through Google Pay opens new opportunities for customer acquisition, higher transaction volumes, and repeat business. As BNPL services gain more traction, the integration of these platforms into major payment systems like Google Pay positions it as a competitive player in the evolving digital payments market. As more retailers and payment providers like Apple expand their BNPL partnerships, it’s clear that flexible payment solutions are becoming a key feature in modern online shopping experiences.
