A Klarna IPO Would Be a Bit Like ‘Buy Now, Regulate Later’
Britain’s race to attract tech listings shouldn’t come at the expense of consumers.
Buy now pay later.
Source: Bloomberg
After failing to persuade chipmaker ARM Holdings Plc to float on the London Stock Exchange, Rishi Sunak’s government will no doubt be eager to ensure another IPO doesn’t slip from its grasp. But a race to woo Swedish fintech Klarna Bank AB would risk colliding with the urgent need to better regulate the Buy Now, Pay Later (BNPL) market.
Like many strands of the e-commerce and payments world that boomed during the pandemic, BNPL has gone through an epically frothy bubble, with privately held Klarna and publicly traded rival Affirm Holdings Inc. each worth around $46 billion during the 2021 peak. Consumers cooped up at home lapped up the opportunity to pay for sneakers, clothes or laptops over several instalments online rather than all in one go. Growth rates were extraordinary: BNPL transactions reached about $147 billion worldwide in 2021, nearly doubling in a year.