Consumers shopping through Klarna will now be able to earn rewards with each purchase, as part of the platform’s new loyalty program, Vibe, which launches in the summer. The company states it is the first buy now, pay later service provider to offer a rewards program to its customers.
For every dollar spent through the Klarna app, consumers participating in the program will earn one “Vibe.” Members can then redeem these Vibes for rewards such as gift cards to major retailers, including Foot Locker, Starbucks and Sephora. The Vibe program will be free to join, and rewards can be earned throughout Klarna’s merchant network, which consists of more than 200,000 retailers.
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“We’re laser focused on providing our nearly 8 million U.S. consumers with the most convenient, seamless and enjoyable shopping experience possible — and the Vibe program builds on our efforts,” said Sebastian Siemiatkowski, CEO of Klarna. “Vibe members have the freedom to shop everywhere and will enjoy access to unique, tailored benefits from hand-picked partners, in addition to exclusive offers, deals and other rewards.”
The program will be rolled out in the U.S. first, before being extended to other geographies, such as Australia, the U.K. and Germany. A company spokesman said the decision to launch first in the U.S. was a result of enthusiasm from consumers and the current popularity of loyalty programs in that market.
“U.S. consumers are more familiar with loyalty programs and so this is a key factor in delivering value and an end-to-end shopping experience,” said the company spokesperson.
Rewards programs are most commonly associated with credit cards, a payment method that is decreasing in use among younger demographics (only a third of millennials currently own a credit card). For consumers who have opted out of traditional credit and the associated interest rates, that has meant missing out on the rewards. Though as an alternative, shoppers can also participate in loyalty programs with a specific brand or retailer.
With Vibe, Klarna aims to extend the wider eligibility associated with credit card rewards programs to its credit-averse users. And it also caters to shoppers who already have loyalty cards at participating Klarna merchants — the Vibe program allows them to earn additional points on those purchases.
Last week, Klarna reported it had reached 7.85 million U.S. users on its platform. With many consumers looking to budget their finances more carefully during the current recession, there has been an increase in shoppers taking advantage of buy now, pay later options. In order to encourage responsible spending, Klarna customers will only receive their Vibe rewards after all payments on their purchases have been completed on time.