Klarna, a Swedish payments company, announced a collaboration with the consumer finance app, OnePay to provide installment loans for purchases at Walmart in the US. Installment loans are a common form of consumer lending that allows borrowers to repay a fixed amount over a specified period, making them popular for high-value items like electronics and vehicles.

In contrast to revolving credit, installment loans offer fixed payments and often lower or no interest rates, making them a more cost-effective alternative to traditional credit cards. Retailers are increasingly teaming up with lenders to offer installment financing at checkout to increase sales by providing consumers with more payment flexibility.

Sebastian Siemiatkowski, Klarna's CEO, described the partnership as a significant development that will reshape the checkout experience at the world's largest retailer, both online and in physical stores. Klarna, known for its buy now, pay later service, is preparing for its anticipated initial public offering (IPO) in the US, revealing a 24% revenue surge in 2024. The fintech company aims to raise over $1 billion with a valuation exceeding $15 billion.

The collaboration with OnePay will give millions of Walmart customers flexible payment choices, integrated directly at checkout this year. Approved customers can select repayment periods of 3 to 36 months and manage their loan through the OnePay app.