Klarna, Brookfield Bring BNPL to Malls as Consumers Demand More In-Store Availability

Swedish buy now, pay later (BNPL) giant Klarna and top-5 U.S. mall owner Brookfield Properties are teaming up to bring installment payment plans to thousands of retail tenants at over 150 shopping centers.

In an announcement on Friday (Feb. 25), the two companies said they had reached an exclusive multi-year partnership that would not only bring the popular payment plans to more retailers and shoppers but would also include a range of experiential activities, including media, livestreamed shopping, and augmented reality.

“The way our customers shop changes constantly and it is our job to evolve with them,” Katie Kurtz, SVP of Business Development at Brookfield Properties said in the announcement, calling it a “natural match” for a company that hosts roughly 70 million shoppers a month at its malls.

For Klarna, the move into malls marks its third new venture this month after announcing the launch of its U.K. rewards program and the debut of its “Klarna Card” for use in physical stores.

It’s all part of what Klarna North America lead David Sykes sees as a “blending [of] the physical and digital worlds” to meet customers’ needs, by offering them more convenient, flexible ways to shop and pay, while looking forward to partnering with new retail tenants.

More to Come

To be sure, the Klarna-Brookfield deal is not the first such collaboration of its kind and comes at an interesting time of transition for both the retail sector and consumer finance.

Last summer, Afterpay and Unibail-Rodamco-Westfield, the French owner of Westfield shopping centers, announced a similar, wide-ranging plan to bring BNPL and other “customer experiences, retail innovation, events, marketing and on-premises advertising” into its partners’ properties.

Although the Omicron flare-up in December hurt holiday visits at many properties, in-store shopping traffic has been trending higher for most of the past year.

Mall owners, such as Simon Property Group, have also spoken recently about their “brick-and-mortar bet” paying off, alongside increasing rents and occupancy, while Brookfield said its properties saw 95% of pre-pandemic foot traffic during the Q4 holiday season.

But wherever and however consumers decide to shop, new PYMNTS data show that demand for payments choice is rising, especially for flexible options such as BNPL.

According to the new study BNPL And The In-Store Opportunity: Why Merchants Must Offer Payments Flexibility At The POS, a PYMNTS and Zip collaboration, merchants that don’t offer and actively promote the acceptance of in-store BNPL are missing out on millions of dollars worth of lost sales — especially among younger millennials and consumers seeking luxury items.