Xero and Klarna partner to offer BNPL services to SMEs

AI-powered payment network Klarna has partnered with cloud-based accounting software provider Xero to launch a new service that enables small businesses to accept and receive 'buy now, pay later' (BNPL) payments.

The collaboration allows Xero’s users to offer Klarna’s payment plans, providing a more convenient and affordable way for their clients to make purchases and complete payments.

This initiative aims to offer Xero’s clients an alternative to credit cards, allowing them to receive upfront payments for their services, while consumers avoid high interest rates and hidden fees.

Klarna’s system verifies a consumer’s eligibility before approving each purchase and provides a clear instalment plan with reminders to help shoppers stay on top of their payments.

According to data from Klarna, these measures result in 99% of lending being repaid, with 40% of orders repaid early.

Bharathi Ramavarjula, Senior Vice President of Payments & Ecosystem at Xero, stated that enabling customers with more payment options, including Klarna, can help them retain customers and increase their revenue.

“We know that maintaining a healthy cash flow is critical to a successful business, and offering more ways to pay supports increased business growth and getting paid faster. By enabling our customers with more ways to pay, including Klarna, we can help them retain customers and increase their revenue.”

David Sykes, Chief Commercial Officer at Klarna, highlighted how Klarna’s flexible payment options have expanded over the past years, moving beyond the firm’s traditional association with clothing and footwear shopping. Klarna’s payment options are now available to micro businesses of all kinds.

“This includes businesses where gardeners and landscaping services using Xero can now offer a Klarna BNPL payment option. Plumbers and heating engineers using Xero can fix their customers’ boilers and let them spread the cost, while small businesses in the construction industry can spread the cost of smaller projects over three interest-free instalments.”



Share Story:

Recent Stories


Data trust in the AI era: Building customer confidence through responsible banking
In the second episode of FStech’s three-part video podcast series sponsored by HCLTech, Sudip Lahiri, Executive Vice President & Head of Financial Services for Europe & UKI at HCLTech examines the critical relationship between data trust, transparency, and responsible AI implementation in financial services.

Banking's GenAI evolution: Beyond the hype, building the future
In the first episode of a three-part video podcast series sponsored by HCLTech, Sudip Lahiri, Executive Vice President & Head of Financial Services for Europe & UKI at HCLTech explores how financial institutions can navigate the transformative potential of Generative AI while building lasting foundations for innovation.

Beyond compliance: Transforming document management into a strategic advantage for financial institutions
In this exclusive fireside chat, John Rockliffe, Pre-Sales Manager at d.velop, discusses the findings of Adapting to a Digital-Native World: Financial Services Document Management Beyond 2025 and explores how FSIs can turn document workflows into a competitive advantage.

Sanctions evasion in an era of conflict: Optimising KYC and monitoring to tackle crime
The ongoing war in Ukraine and resulting sanctions on Russia, and the continuing geopolitical tensions have resulted in an unprecedented increase in parties added to sanctions lists.