As credit card companies expand their premium offerings, Klarna is introducing membership tiers that provide perks for a price.
The company’s two tiers—Premium and Max—are launching first in Europe, with a U.S. rollout planned in the coming weeks. Subscribers will be able to redeem cash back rewards directly with Klarna’s travel and airline partners and enjoy benefits like airport lounge access, a ClassPass fitness and wellness membership, subscriptions to magazines and newspapers, and even a metal card.
Unlike traditional credit cards that charge an annual fee, Klarna’s model is a monthly subscription. The top-tier Max plan costs €44.99 ($52.39) a month, yet Klarna claims it delivers more than €5,000 ($5822.17) in annual value through its perks.
“Loyalty programs are a great customer acquisition strategy,” said Ben Danner, Senior Credit and Commercial Analyst at Javelin Strategy & Research. “The idea is to bring customers into the Klarna ecosystem and reward them for using their Klarna balance, which can be loaded by way of a debit card or bank transfer.”
“This positions Klarna as more than just a buy now, pay later vendor, but more in line with Venmo, where balances are stored and drawn from like a bank account,” he said. “However, the monthly fees to belong to the program cannot be too expensive for the region’s consumers and will need to align with consumer interests—and Klarna will need to do its research before launching this program in the U.S.”
Perks Without the Debt
Other companies, such as American Express and Chase, have revamped their premium tiers to offer more benefits while raising their annual fees. Citi followed suit with the launch of its Strata Elite card, and Capital One has entered this market with its Venture X card.
All of these products target more affluent customers, who have become increasingly attractive to issuers as economic conditions have worsened and many consumers have racked up credit card debt.
The Go-To App
Klarna’s model is unique because it gives users premium perks that aren’t tied to credit. Instead, membership rewards are linked to the Klarna Card, which functions as both a debit and BNPL card.
This marks another step in Klarna’s evolution toward becoming a full-scale financial services company. Like many of its fintech competitors, the company aims to be the go-to super app for consumers.
“It’s a similar play to what Venmo is doing here in the U.S—bringing customers into their ecosystem, presenting a physical card option to spend funds, driving money into their app, and offering card rewards,” Danner said. “And the metal card makes it feel more premium.”
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