DoorDash × Klarna, Food Delivery on Installments
DoorDash is set to introduce a “buy now, pay later” system in collaboration with Klarna. This will allow customers to place food orders without making immediate payments, instead opting to defer payment or split it into multiple installments.
DoorDash plans to offer three payment options through its partnership with Klarna. Customers can choose to pay the full amount upfront, split the payment into four interest-free installments, or defer the payment to a specific date, such as payday. This allows for greater flexibility in managing expenses.
Klarna is already available on platforms like Grubhub and Apple Pay, and this partnership marks an expansion of its services into the grocery and dining sectors. David Sykes, Klarna’s Chief Commercial Officer, stated that this collaboration represents “a significant expansion into everyday spending categories.”
While this payment method provides convenience for customers, concerns are being raised about its economic implications. According to data from the New York Federal Reserve, the percentage of Americans hesitant to apply for credit cards, mortgage loans, and car loans has risen to 8.5%, the highest level since tracking began in 2013. The BNPL (Buy Now, Pay Later) service has gained popularity as an alternative to credit cards, but potential risks include high late fees and negative impacts on credit scores.
The BNPL industry saw rapid growth during the pandemic, contributing to the surge in online shopping. However, some service providers have been criticized for imposing unfavorable conditions on consumers regarding refunds and disputed charges. This led to regulatory action by the Consumer Financial Protection Bureau in May 2024.
In response to these concerns, Klarna defended its business model, stating, “We do not charge interest and operate by encouraging customers to pay on time.” It explained that users who miss payments are restricted from making further deferrals, resulting in a repayment rate of 99%. The average amount owed per user is approximately $100.
DoorDash aims to offer more flexible payment options through this partnership, while Klarna continues expanding its services in preparation for an initial public offering (IPO). Currently, Klarna operates in 26 countries and partners with over 675,000 merchants.
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