Klarna enters $122bn car rental market, historically a credit card stronghold.
London, UK, 13 December, 2023 – Klarna, the AI-powered payments network and shopping assistant, today announced an agreement with CarTrawler, the leading B2B technology provider of car rental and mobility solutions to the global travel industry. Under the agreement, travelers can now pay for their car rental using Klarna’s full range of flexible payment options, including interest-free Buy Now Pay Later (BNPL), when they book on over 70+ airlines and 250+ travel websites.
CarTrawler aggregates over 2,000 car rental and mobility suppliers into a booking platform that allows 250 airlines and online travel agencies to offer car rental, airport transfer and ride hailing services on their websites. Thanks to the agreement, Klarna is currently live on 25 airline websites across 15 countries, including Vueling, TAP Air Portugal, Eurowings. The two companies are working together to launch on further websites in the near future.
A total of $122bn was spent on car rental globally in 2022, a figure that is growing at over 7% a year. Historically, most of that has been spent using a credit card but this new agreement gives consumers a fairer way to access credit for car rental.
Klarna’s short-term, interest-free BNPL products are built to prevent people from building up large outstanding balances. The company only lends to those who can afford to repay by conducting strict eligibility checks on each and every transaction which gives a real-time view of a consumer’s financial circumstances, unlike credit cards. When a customer misses a payment, Klarna will automatically restrict access to credit services to prevent debt building up. All of these measures lead to losses that are less than 1%, 30-40% lower than credit card companies.
“We are super excited to bring our fair payment methods to travelers across Europe with this CarTrawler agreement,” says Raji Behal Head of Western and Southern Europe, UK & Ireland at Klarna, “Providing consumers with flexible payment options and the opportunity to spread the cost of larger purchases like car rental has never been more important.”
Commenting on the partnership, Chief Customer Officer of CarTrawler, Darren Lovern, said: “Consumer demand for innovative, flexible payment options continues to grow, and our partnership with Klarna, a highly responsible BNPL provider enables our partners to offer their customers more choice and budget control for car rental and airport transfers. This new initiative is in direct response to the insight we have gathered across our global travel network for changing preferences in the market, and we’re delighted to continue to evolve our business in line with what customers want and need. For our airline and travel partners, more flexibility in consumer choice can support more opportunities to drive ancillary revenue growth.”