Klarna partners with UATP to tap the $1 trillion air travel industry
PRNewswire 10-Sep-2024 8:00 AM
The partnership brings together a globally recognized BNPL provider with the most trusted name in travel payments
WASHINGTON, Sept. 10, 2024 /PRNewswire/ -- UATP, the global payment network that enables organizations to simplify payment processes and expand their payment capabilities, has announced a new partnership with Klarna, the AI-powered global payments network. The partnership allows airlines to offer Klarna's flexible payment services, including interest-free Buy Now Pay Later, providing customers with more flexible payment options for travel products and services.
UATP's collaboration with Klarna represents the convergence of two highly successful payment technology companies, with mutual benefits on the horizon. Klarna gains immediate access to UATP's vast base of airlines and travel agencies and is a preferred BNPL partner for EU and APAC.
The $1 trillion air travel sector is a key growth opportunity for Klarna because credit cards account for 70% of retail travel payments. This leads to high costs for airlines, who spend $20bn a year on payment processing, and massive interest payments for consumers. Wherever Klarna is available on a travel site, consumer adoption is very high: the total value of travel booked through Klarna has increased by 50% in the past year.
For UATP, integrating Klarna further strengthens the payment network's support for BNPL options. Offering a variety of BNPL choices helps UATP merchants tap into a global BNPL market estimated at $14.55 billion this year and is expected to grow at a CAGR of 26.50% to reach $60.47 billion by 2030.
The Convenience and Ease of BNPL from a Trusted Provider
"BNPL is an essential payment option for travel merchants to provide their customers. It offers flexibility and convenience to encourage travelers to complete transactions and boost conversion rates," says Zach Ornelas, SVP of Global Sales for UATP. "But to reap the full benefits of having this payment option, merchants need a BNPL partner that their customers know and trust. Klarna is that partner."
Klarna offers consumers a choice of ways to pay including immediate payments, short-term, interest-free BNPL and longer-term financing. Globally, about 30% of the payments Klarna processes are immediate payment.
Klarna's BNPL is a short-term, interest-free credit service with no fees when paid on time. Klarna underwrites every transaction based on strict eligibility assessments and boasts a 99% repayment rate globally. This model provides consumers with a transparent and predictable repayment structure, making it easier to manage their finances without accumulating interest.
A Speedy and Complementary Expansion into the Travel Vertical
By leveraging UATP's existing connections and expertise in alternative forms of payment, the partnership between UATP and Klarna enables airlines and other travel merchants on the UATP network to introduce BNPL more quickly, eliminating resource-intensive implementation work and lowering the cost per transaction. It also allows Klarna to quickly access the travel merchants connected to the UATP network, expanding their exposure to the travel vertical and enhancing their growth opportunities in this sector.
"Travel is perfect for interest-free buy now, pay later, allowing travelers worldwide to spread the cost of their trips and without getting stuck paying sky-high credit card interest rates," says Erin Jaeger, Head of North America, Klarna, "This agreement with UATP means we can quickly bring these benefits to many more airlines and tap into the huge growth opportunity which the $1 trillion travel industry represents for us.""
The UATP and Klarna partnership is expected to go live in Q3 of 2024. For more information about UATP and its partnership with Klarna, please contact Wendy Ward at wendy.ward@uatp.com.
ABOUT UATP
UATP is the global payment network simplifying payments in complex industries. We make it easy for businesses to make or accept any type of payment; open new markets, drive growth and reduce costs for Issuers, Merchants, vendors, agents, aggregators and more. UATP is continually innovating to connect companies to new forms of payment (AFPs), and our easy-to-use data tools, DataStream® and DataMine®, provide comprehensive account details to Issuers and Corporate Account Holders. Our team has decades of experience with the ever-changing payments landscape, and our reliable and proven technology ensures our global customers get more from every payments experience. Learn more at uatp.com.
Accepted as a form of payment for corporate business travel worldwide by airlines, travel agencies and Amtrak®; UATP accounts are issued by: Aeromexico; Air Canada (TSE: AC); Air China; Air New Zealand (ANZFF.PK); Air Niugini; American Airlines (NASDAQ:AAL); APG Airlines; Austrian Airlines; Avianca Airlines; BCD Travel; China Eastern Airlines (NYSE:CEA); Delta Air Lines (NYSE:DAL); EL AL Israel Airlines; Etihad Airways; Fareportal; Frontier Airlines; GOL Linhas Aereas inteligentes S.A. (NYSE:GOL); Hahn Air; High Point Travel; Japan Airlines (9201:JP); JetBlue Airways; LATAM Airlines; Link Airways; Qantas Airways (QUBSF.PK); Shandong Airlines; Sichuan Airlines; Southwest Airlines; Sun Country Airlines; TUIfly GmbH; Turkish Airlines (ISE: THYAO); United Airlines (NASDQAQ: UAL) and WestJet. AirPlus International issues the UATP-based Company Account for Lufthansa German Airlines.
About Klarna
Since 2005 Klarna has been on a mission to accelerate commerce with consumer needs at the heart of it. With over 150 million global active users and 2 million transactions per day, Klarna's fair, sustainable and AI-powered payment and shopping solutions are revolutionizing the way people shop and pay online, empowering consumers to shop smarter with greater confidence and convenience. More than 500,000 global retailers integrate Klarna's innovative technology and marketing solutions to drive growth and loyalty, including H&M, Saks, Sephora, Macy's, Ikea, Expedia Group, Nike and Airbnb.
Klarna is a founder-led company backed by Sequoia Capital and a broad base of internationally distinguished investors and institutions including Bestseller, Commonwealth Bank of Australia, Mubadala Investment Company, Silver Lake, Dragoneer, GIC, BlackRock, Wellcome Trust, CPP Investments and Atomico. For more information, visit Klarna.com
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SOURCE UATP
