Klarna has introduced a new cashback initiative for its 12 million customers in the UK. This service allows users to make purchases on credit and pay over time. Through the Klarna app, customers can now earn up to 10% cashback on their online shopping from various retailers like Boots, Expedia, Dyson, Samsung, and Hotels.com, with more to be added.
The cashback earned can be utilized within the Klarna app, applied to the Klarna balance, withdrawn, or put towards future purchases where Klarna is accepted. There is no cap on the amount of cashback that can be earned, but inactive accounts for 90 days may see their cashback expire, except for members of the paid Klarna membership scheme, which has no cashback expiration policy.
David Sandström, Klarna’s chief marketing officer, highlighted that the cashback feature enhances the customer experience by providing value during the peak shopping period. Klarna offers interest-free repayment options on most payment plans, such as “Pay in 30 days” and “Pay in 3”. However, missing a payment can result in a late fee of £5 for orders over £30 or 25% of the purchase price for orders under £20. Additionally, non-payment may lead to sharing information with credit agencies, impacting credit reports negatively.
The Financial Conduct Authority (FCA) is addressing concerns about customers potentially taking on unaffordable debt through buy now, pay later services. Under forthcoming regulations, providers must assess borrowers’ repayment ability and offer assistance in financial distress. Borrowers will have recourse to the Financial Ombudsman Service for complaints, and the new rules will be under the FCA’s jurisdiction starting July 2026, with firms having six months to seek full authorization.
