Klarna has recently introduced its payment service on Google Pay, allowing users to make purchases in instalments. Klarna, a popular buy now, pay later lender, offers interest-free repayment plans such as “Pay in 30 days” and “Pay in 3”. However, late payments may incur fees, ranging from £5 for orders over £30 to 25% of the purchase price for orders under £20. Additionally, failure to make payments on time can negatively impact the individual’s credit report as information may be shared with credit referencing agencies.

Repaying on time and using buy now, pay later services responsibly can demonstrate creditworthiness. Klarna boasts approximately 12 million customers in the UK. Raji Behal, Head of Western and Southern Europe, UK & Ireland at Klarna, expressed enthusiasm about offering Klarna’s payment options on Google Pay, emphasizing the goal of providing convenient and transparent payment solutions.

Lisa Yokoyama, Director of Product Management at Google Pay, highlighted the collaboration with Klarna as a means to offer users more payment flexibility. The buy now, pay later sector will soon be regulated by the Financial Conduct Authority (FCA) starting July 15, 2026. Under the new regulations, clear and upfront details about payment agreements must be provided, including payment schedules, amounts due, and consequences of missed payments. Lenders must assess customers’ ability to repay, offer support during financial difficulties, and ensure fair treatment, subject to Consumer Duty rules for enhanced consumer protection in the UK financial services sector.