The Swedish buy now, pay later company Klarna Group will unseat Affirm Holdings as the exclusive provider of installment loans at Walmart, Klarna announced Monday.
Those installment loans will be offered through OnePay, a digital payments app that Walmart shoppers can use at checkout online and in the store, Klarna said in a news release. OnePay is a service provided by One, the fintech established by Walmart and venture capital firm Ribbit Capital in 2021 that is majority owned by the retailer.
Affirm first partnered with Walmart in 2019.
The change will be made gradually, a Klarna spokesperson said in an email. OnePay will start integrating Klarna installment loan options into Walmart’s checkout in the coming weeks and those options “will be scaled to all Walmart channels by the holiday season,” the spokesperson said.
Klarna products available to Walmart customers include loans ranging from three months to 36 months, the spokesperson said.
The move gives Klarna access to a Walmart customer base that spends hundreds of billions of dollars every year. Walmart is the largest retailer in the United States, based on 2023 sales according to the National Retail Federation. Walmart reported $681 billion in revenue for the fiscal year that ended on Jan. 31, according to an earnings report.
“We will continue our long-term strategy of competing on our products and entering into sustainable partnerships,” an Affirm spokesperson said in an emailed statement that did not address the Walmart news.
Affirm installment loans are still available as an option at Walmart’s checkout at this point, the company said in an SEC filing Monday. The BNPL provider noted that sales through Walmart were about 5% of its gross merchandise volume for the second half of last year. They also represented about 2% of its adjusted operating income.
“Although the loss of a significant retail partner, especially one as important as Walmart, is impossible to spin positively, in our opinion, there is a key reason why Klarna’s reported contract is not one that Affirm would favor,” William Blair analysts wrote in a note to investors Monday.
Affirm prefers to control the user experience, and would not have wanted to cede control over that experience to OnePay, the analysts wrote.