Klarna's Losses Double as More 'Buy Now, Pay Later' Customers Skip Paying Loans Back
Share this @internewscast.com

Buy now, pay later giant Klarna suffered a doubling of net losses in the first quarter as an increasing number of customers failed to pay back their loan installments.

TechSpot reports that Klarna, a major player in the buy now, pay later (BNPL) industry, recently reported that its net losses for the first quarter reached a staggering $99 million, nearly twice the $47 million it lost during the same period last year. The company, which offers its BNPL services to a wide range of merchants, allows customers to purchase items in installments while making money by charging fees to merchants and customers who fail to pay on time.

According to Klarna’s first quarter earnings report, consumer credit losses rose to $136 million, a 17 percent increase compared to the previous year. This trend of BNPL customers struggling to meet their contractual obligations seems to be growing, as evidenced by a recent survey conducted by credit platform LendingTree. The survey found that 41 percent of BNPL users reported paying late on at least one loan in the past year, up from 34 percent a year ago. High-income borrowers, men, young people, and parents of young children were among the most likely to pay late.

The LendingTree survey also revealed that a quarter of BNPL users relied on these loans to purchase groceries amidst rising supermarket costs, marking a 14 percent increase from the previous year. Additionally, nearly 1 in 4 BNPL users reported having three or more active BNPL loans simultaneously. This data raises concerns about the sustainability of the BNPL model and its potential impact on both consumers and the companies offering these services.

In an effort to cut costs, Klarna has turned to artificial intelligence. The company’s earnings, presented using an AI-generated avatar of its chief executive, revealed that Klarna’s headcount has decreased by 39 percent over the last two years, and customer service costs were down 12 percent year-over-year in the first quarter. It is estimated that Klarna has replaced 700 employees with AI.

However, the company has recently begun hiring humans again after its CEO admitted that AI customer service chatbots provided a “lower quality” output. This move suggests that while AI may help streamline certain processes and reduce costs, human employees remain essential for delivering high-quality customer service and maintaining customer satisfaction.

Read more at TechSpot here.

Lucas Nolan is a reporter for – News covering issues of free speech and online censorship.

Share this @internewscast.com
You May Also Like

Injured Colorado Woman Braves Wilderness, Crawls to Safety with a Broken Leg

A Colorado grandmother was forced to crawl back to her house for…

Chinese Scientist’s Family Speaks Out Following Her Suicide

The family of Dr. Jane Wu, an esteemed Chinese American neuroscientist, has…

Bill Gates Loses $51 Billion in a Single Week: A Shocking Drop in Net Worth

Bill Gates experienced a dramatic $51 billion decline in his net worth…

Border Appointee Under Trump Confronts Heckler Aggressively in Heated Exchange

Trump’s Border Czar Tom Homan had some strong words for a heckler…

Kate Thrills Wimbledon Crowd as She Enters Royal Box

The Princess of Wales put her best fashion foot forward and appeared…

Trump Encounters Backlash on His Social Media Platform Regarding Jeffrey Epstein

President Donald Trump encountered opposition from his loyal MAGA supporters following a…

Teen Charged with Killing Parents Shared Videos on Coping with Grief

The 17-year-old girl accused of gunning down her mother and stepfather had…

Kris Jenner and her new friend Oprah enjoy a vacation together after connecting at Bezos’ wedding

Kris Jenner and her new pal Oprah Winfrey cemented their friendship on…

Parents of Shooter Responsible for Trump Incident Maintain Silence One Year Later

Behind the blackout blinds that cover every window and the cameras that…

Oregon Mother and Children Detained for Days at Canadian Border

An Oregon mother and her four children, all U.S. citizens, have been…

Trump Supports Bondi Despite Criticism Regarding Epstein Case Files

President Donald Trump cast his support behind Attorney General Pam Bondi amid…