Klarna is partnering with Adyen to bring buy now, pay later into physical stores.

According to CNBC, Klarna said Thursday that it had entered into an agreement with Adyen to add its buy now, pay later products to physical payment terminals.

Klarna will be included as an option across more than 450,000 Adyen payment terminals in brick and mortar locations.

As a result of the deal, the partnership will initially launch in Europe, North America and Australia, with a wider rollout planned later down the line.

Joe, let's go to you first.

What are your thoughts here on buy now, pay later coming in store?

And what does that mean for the future of retail?

Yeah, it's been a slow roll with buy now, pay later making the transition from the e comm checkout experience to the physical store POS experience.

But I saw a stat recently that said something like, I don't know, 15% to 20% of retailers already do some sort of BNPL in stores.

So again, that's definitely a small percentage overall.

I think what I'm looking for here is it's going to be really interesting to see which retailers take Klarna and Adian up on this offer and just kind of how it gets communicated in stores.

Right.

I mean, I'm used to, we're all maybe used to the department store experience with the little thing about save 20% if you sign up for our store credit card at POS.

But will it be like giant signs saying pay in four, like throughout the stores that adopt this?

Or will it be more subtle and kind of if, you know, you know, like just a little Karna branding for those shoppers who already are kind of working, working with the brand.

But I mean, I think payment flexibility for shoppers is a good thing.

I think it kind of adds to the set of choices that somebody has while they're waiting to pay.

And for some shoppers, that'll probably be a good thing.

And for a lot of shoppers, they'll just keep breaking out their credit card or debit card or maybe even cash as they always did.

Yeah, I mean, Jo, I think that you bring up an important point, and I actually found some research.

So Marnie Shapiro, she's the vice president of global advertising and affiliate partnerships at Afterpay, they did a study and they found that Gen Z is actually more likely to use buy now, pay later than they are credit cards.

So I think you're right in.

You know, how are they going to message this at checkout and how are they going to bring in that next generation of Shopper, because they're offering something like this, especially as Gen Z is also going to be the highest paid spending power.

They will have the highest paid spending power in human history.

And by 2030.

So just five, a little over five years from now, once that Gen Z generation has really come into the workforce, they will account for almost half of total spending.

So I think when you look at what Adyen and Klarna are doing here and how they're setting themselves up for success in the future, you know, you gotta, you gotta follow the money, as Chris would say.

And I think this move is setting retailers up to, to do just that.

But, Chris, I'll let you.

Oh, go ahead, Joe.

Yeah, jump in.

I think another way of looking at it is that sort of next generation of omnichannel or unified commerce story that everybody is talking about these days about just making the customer experience when you're in a store as consistent with online as possible.

And I can see.

Great point, retailers being excited about this or interested in this, because it is another way to make those two experiences consistent and to be able to say to somebody who shops your brand online, oh, you can now use the same payment method that you like when you come visit us in stores.

So I think it, it kind of helps with that, that unification of, of the two sides.

That's such a great point, Joe.

Yeah.

I mean, that, I had not even thought about that until you just said that.

But, yeah, it's totally, you know, you're totally, like, leaving consumers right now in, in kind of the lurch potentially when they're in store, when you want them to have the most seamless shopping experience possible.

And, you know, then you're making them go online to order something so that they can get installment financing like that.

That's a very disjointed experience if that's where these retailers are at.

But, Chris, I'll give you the last word here.

Yeah, I mean, I got a couple thoughts here.

Like, actually, this, one of the reasons I loved one of this is this.

This topic is one of the reasons I love doing this show, because Joe particularly made me think of something that I never thought about.

Like, why haven't we seen a retailer, you know, brand its own BNPL service in partnership with one of these companies?

Like, right.

Why isn't that included in the e commerce checkout?

And why aren't they bringing that in store?

And you have to think that's probably going to happen at some time.

At some point.

If you look at the history of retail for the past 30 or 40 years, because that's already happened via credit card.

So.

So that's an interesting topic that I've never, ever given headspace before.

So thank you for that, Joe.

Well done, my friend.

Um, but the other point id make is I actually think this headline is in the running for, you know, retail headline of the year when you think about it in terms of the overall long term impact that this is going to have on changing consumer behavior and how we shop a retail store.

And the number I would.

The, the statistic I would point out from the article that I think keys into that is 5%.

5% is the number I want people to remember, because that is the percentage of all e commerce transactions that the CNBC article reports comes via Klarna's BNPL service.

5%.

Okay.

5% of all e commerce transactions are coming from Klarna's BMPL service.

That's a pretty big number on its own.

And remember, e commerce, what, 20% of all retail sales?

So 5% of 20% is already pretty big.

But what's bigger is x percent of the 80% that's still out there in physical retail.

And it's going to come at some point, because BNPL expands people's wallets and gives them the ability to pay on interest free installments.

There's no reason not to use it relative to a credit card, if you can.

So therefore, it's a huge, huge move from both Karna and Adian that we're going to see play pay dividends over time.

Zachary?

Oh, yeah, Chris, like, you got me thinking.

Remember when we talked to LVR about this kind of concept, too?

About like, how, like, there, there is so much opportunity here.

Um, yeah, you're right.

The, the retailers having their own buy now, pay later program with the, with a provider like Klarna or somebody else like that.

That, that in itself is another huge area of opportunity when we're going to see so much growth in this.

Yeah.

And I don't understand the payment space that.

Well, that's never a segment of retail that I got that exposed to.

But you have to wonder what, what's holding that up?

Is it just the traditional, like, retailers are scared to try things new?

Try new things?

Excuse me.

Or, you know, or is there some other, you know, mechanical thing that holds it up with how payments are conducted?

But anyone out there that knows, please let us chime in and let us know your thoughts.