Finance

Klarna partners with Adyen to bring buy now, pay later in-store

Published

3 months ago

September 26, 2024

Business Finance News

“Buy-now, pay-later” firm Klarna aims to return to profit by summer 2023.

Jakub Porzycki | NurPhoto | Getty Images

Swedish firm Klarna is partnering up with Dutch payments fintech Adyen to bring its popular buy now, pay later service into physical retail stores.

The company said Thursday that it had entered into an agreement with Adyen to add its payments products as an option at physical payment machines used by the Amsterdam-based fintech’s merchant partners.

Klarna will be included as an option across more than 450,000 Adyen payment terminals in brick-and-mortar locations as a result of the deal, according to the companies. The partnership will initially launch in Europe, North America and Australia with a wider rollout planned later down the line.

Klarna’s buy now, pay later, or BNPL, service allows users to spread the cost of their purchases over a period of interest-free installments. The service is mostly associated with online shopping, which currently accounts for about 5% of the global e-commerce market, according to Klarna.

Klarna launches savings and cashback rewards programs

Targeting consumers in-store has become an increasingly important priority as Klarna and other firms in the sector such as Block‘s Afterpay, Affirm, Zip, Sezzle, and Zilch seek to expand their reach.

The move expands on a previous arrangement Klarna had in place with Adyen on e-commerce payments.

“We want consumers to be able to pay with Klarna at any checkout, anywhere,” David Sykes, chief commercial officer at Klarna, said in a statement Thursday.

“Our strong partnership with Adyen gives a massive boost to our ambition to bring flexible payments to the high street in a new way.”

Adyen’s head of EMEA, Alexa von Bismarck, said the deal was about giving consumers flexibility at checkout, adding that “consumers care deeply about the in-store touch point and value brands which can allow them to pay how they want.”

Earlier this year, Klarna sold Klarna Checkout, the company’s online checkout solution for merchants. This saw the firm compete less directly with payment gateways including the likes of Adyen, Stripe, and Checkout.com.

Klarna’s deal with Adyen comes as the Swedish tech giant is exploring a much-anticipated initial public offering.

Klarna hasn’t yet set a fixed timeline on when it expects to go public, however the firm’s CEO Sebastian Siemiatkowski told CNBC earlier this year that a 2024 IPO for the business wouldn’t be “impossible.”

In August, Klarna began rolling out a checking account-like product, called Klarna balance, as well as cashback rewards in a bid to convince consumers to move more of their financial lives over to its platform.

BNPL has faced criticisms from consumer rights campaigners, however, over fears it promotes the idea of consumers spending more than they can afford. Regulators are pushing for rules to bring the nascent — but fast-growing — payment method into regulation.

The recently elected U.K. Labour government is expected to set out plans for buy now, pay later regulation soon.

City Minister Tulip Siddiq said in July that the government would establish new proposals “shortly” after multiples delays to the previous Conservative government’s regulation plans for BNPL.

Finance

Treasury delays deadline for small businesses to file new BOI form

Published

11 hours ago

December 26, 2024

Business Finance News

Janet Yellen, U.S. Treasury secretary, on a tour of the Financial Crimes Enforcement Network (FinCEN) in Vienna, Virginia, on Jan. 8, 2024.

Valerie Plesch/Bloomberg via Getty Images

The U.S. Treasury Department has delayed the deadline for millions of small businesses to Jan. 13, 2025, to file a new form, known as a Beneficial Ownership Information report.

The Treasury had initially required many businesses to file the report to the agency’s Financial Crimes Enforcement Network, known as FinCEN, by Jan. 1. Noncompliance carries potential fines that could exceed $10,000.

This delay comes as a result of legal challenges to the new reporting requirement under the Corporate Transparency Act.

The rule applies to about 32.6 million businesses, including certain corporations, limited liability companies and others, according to federal estimates.

Businesses and owners that didn’t comply would potentially face civil penalties of up to $591 a day, adjusted for inflation, according to FinCEN. They could also face up to $10,000 in criminal fines and up to two years in prison.

However, many small businesses are exempt. For example, those with over $5 million in gross sales and more than 20 full-time employees may not need to file a report.

Why Treasury delayed the BOI reporting requirement

The Treasury delayed the compliance deadline following a recent court ruling.

A federal court in Texas on Dec. 3 had issued a nationwide preliminary injunction that temporarily blocked FinCEN from enforcing the rule. However, the 5th U.S. Circuit Court of Appeals reversed that injunction on Monday.

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“Because the Department of the Treasury recognizes that reporting companies may need additional time to comply given the period when the preliminary injunction had been in effect, we have extended the reporting deadline,” according to the FinCEN website.

FinCEN didn’t return a request from CNBC for comment about the number of businesses that have filed a BOI report to date.

Some data, however, suggests few have done so.

The federal government had received about 9.5 million filings as of Dec. 1, according to statistics that FinCEN provided to the office of Rep. French Hill, R-Ark. That figure is about 30% of the estimated total.

Hill has called for the repeal of the Corporate Transparency Act, passed in 2021, which created the BOI requirement. Hill’s office provided the data to CNBC.

“Most non-exempt reporting companies have not filed their initial reports, presumably because they are unaware of the requirement,” Daniel Stipano, a partner at law firm Davis Polk & Wardwell, wrote in an e-mail.

There’s a potential silver lining for businesses: It’s “unlikely” FinCEN would impose financial penalties “except in cases of bad faith or intentional violations,” Stipano said.

“In its public statements, FinCEN has made clear that its primary goal at this point is to educate the public about the requirement, as opposed to taking enforcement actions against noncompliant companies,” he said.

Certain businesses are exempt from BOI filing

The BOI filing isn’t an annual requirement. Businesses only need to resubmit the form to update or correct information.

Many exempt businesses — such as large companies, banks, credit unions, tax-exempt entities and public utilities — already furnish similar data.

Businesses have different compliance deadlines depending on when they were formed.

For example, those created or registered before 2024 have until Jan. 13, 2025, to file their initial BOI reports, according to FinCEN. Those that do so on or after Jan. 1, 2025, have 30 days to file a report.

There will likely be additional court rulings that could impact reporting, Stipano said.

For one, litigation is ongoing in the 5th Circuit, which hasn’t formally ruled on the constitutionality of the Corporate Transparency Act.

“Judicial actions challenging the law have been brought in multiple jurisdictions, and these actions may eventually reach the Supreme Court,” he wrote. “As of now, it is unclear whether the incoming Trump administration will continue to support the Government’s position in these cases.”