Klarna’s chief marketing officer David Sandström is taking aim at credit card companies, accusing them of being exploitative and underhand, as reported by Verdict.
“Credit card companies have made an astounding amount of money by essentially cheating and taking advantage of people with bad terms and conditions, high rates and extremely disadvantageous interests,” Sandström told the business publication.
“What we’re seeing now is a whole generation abandoning credit cards. Roughly 70% of American millennials don’t have a credit card because they fear them more than they dread death, according to some reports.”
Sandström argues that a key reason for the recent expansion of the buy now pay later (BNPL) market is customer dissatisfaction with traditional credit card providers.
He insists that the option to spread out payments has an “important function in society” and BNPL is part of “the next big shift in fintech and payments as a result of people having grown tired of credit cards.”
“The modern way to do it is to use buy-now-pay later. It’s consumer friendly. It’s not unfair. It doesn’t have any fees. It’s really transparent. It’s often mobile and digitally available for online shopping,” he adds.
READ MORE: Gen Z shoppers driving the BNPL trend
“I usually say that we have gone from gold to cash, from cash to credit cards and now we’re going from credit cards to alternative payments. Buy-now-pay-later is a part of that.”
Despite speculation that Klarna will soon allow cryptocurrency payments, Sandström denied this, explaining: “When we look at our customer base, and when we’re being honest with ourselves, there aren’t many use cases beyond speculation where you speculate in the cryptocurrency or in digital art, such as NFTs.”
In addition, he revealed that other merchants who tried to integrate crypto into their checkouts had found the feature wasn’t being used as “no one was paying with cryptocurrency” – particularly among clothing retailers.
The news comes as fellow Klarna boss, chief executive officer Sebastian Siemiatkowski, also recently condemned credit card companies, telling CNBC in December 2021 that “these products have not been healthy for consumers, historically speaking.”
The BNPL sector is expected to be keep growing to be worth $166bn by 2023, according to research from GlobalData.