The payments giant is looking to strengthen its position in the UK market.
Klarna, a payments giant turned fintech bank, has acquired Close Brothers Retail Finance (CBRF), the point-of-sale funding arm of merchant banking group Close Brothers Group plc.
The deal is subject to approval by the Swedish regulator, Finansinspektionen.
CBRF, founded in 2014, offers point-of-sale finance solutions to a range of retailers, allowing their customers to spread the cost of purchases over time with fixed monthly payments. It works with more than 600 merchants in the UK, including household names like Samsung Electronics, Mothercare and GAME. The company had a loanbook of £66m as of the end of July this year.
Klarna hopes the deal will strengthen its position in the UK retail finance market as it targets accelerated growth and expansion for its consumer offering.
The Swedish payments firm was granted a full banking licence in June 2017, which it said would pave the way to a broader product set for both customers and merchants.
Michael Rouse, chief commercial officer of Klarna, said in a statement: “We are delighted to welcome CBRF to Klarna, the complementary talents and propositions will help accelerate Klarna’s leadership in the payments market. What CBRF have achieved to date in the UK is impressive but together we can invest in realising the full potential of the business. Outside of the core offering in retail finance, we immediately recognised a shared commitment in building deep partnerships with our merchants so their business thrives and an unrelenting focus on the customer experience. By combining capabilities and leveraging CBRF market knowledge, we are confident that we can offer even more innovative and flexible payment solutions to our merchants and customers in the UK and across markets.”
Klarna claims to have made strong progress in the UK over the past year, with its ‘Pay later’ product now a favourite among a number of well-known UK fashion merchants like ASOS, Arcadia Group and JD Sports. The firm hopes the CBRF deal will bolster its consumer-facing flexible financing product ‘Slice It’ – especially in-store.