Users to get option for paying installments after ordering meals from DoorDash
Fast Food Now on Klarna: Breaking Boundaries with Buy Now, Pay Later
Getting your grub on just got a whole lot easier, thanks to DoorDash and Klarna. This dynamic duo is set to revolutionize the way you splurge on fast food by introducing BNPL (Buy Now, Pay Later) services!
Starting soon, DoorDash users can indulge in their cravings without breaking the bank by using Klarna todivide their payments into four, interest-free chunks. Or, if you're feeling extra thrifty, you can defer those payments until a date that suits your paycheck schedule!
BNPL services, including Affirm and Apple, have been making waves in the retail world for some time now, but their recent inroads into fast food might have economists and consumer advocates scratching their heads. With concerns mounting over the mushrooming use of these services and a somewhat tenuous regulatory landscape, many are wondering just how deep into debt Americans might be sinking.
During the holiday season last year, BNPL usage spiked to an all-time high, racking up over $18 billion in online spending. The option has been particularly enticing to younger consumers who are scrambling to stretch their paychecks further.
To make their move, BNPL providers pocket a percentage of the transaction price from merchants, according to Kansas City Federal Reserve research. This fee varies between 1.5% to 7%. Although this might be a steep price for some retailers, research from RBC Capital Markets shows that online BNPL offerings can boost average ticket sales by 30% to 50% and nudge more customers to seal the deal.
Americans have found themselves in more and more debt over the past few months. Overall debt levels rose by 0.5% in the fourth quarter of last year, reaching an astounding $18.04 trillion, according to the Quarterly Report on Household Debt and Credit. Worryingly, the share of households slipping into arrears on their car payments and credit card bills is at 14-year highs.
As it gears up for its upcoming debut on the NYSE, Klarna is expanding its offerings. The Swedish fintech giant reported a whopping 24% surge in revenue last week, cashing in on the BNPL craze and projecting a market value of over $65 billion.
Beyond fast food, DoorDash also allows users to buy larger-ticket items via third-party merchants like Best Buy and Home Depot. Keep an eye out for a veritable smorgasbord (pun intended) of BNPL options, as competitors like Grubhub are already jumping aboard the BNPL bandwagon.
In the face of increased competition, watchdogs are likely to keep a close eye on the BNPL market. With BNPL services breaking into new sectors like fast food, regulations may become more stringent to protect consumers and ensure transparency. So while the convenience of BNPL might be tempting, keep an eye on your wallet and avoid getting in over your head!
- As Klarna prepares to launch its BNPL services in the fast food industry, questions regarding regulatory oversight have arisen.
- With the growing use of BNPL services and the increasing debt levels among Americans, economists and consumer advocates are closely scrutinizing the potential risks.
- As BNPL services extend their reach into new sectors like fast food, regulatory bodies may tighten rules to safeguard consumers, promote transparency, and prevent excessive debt.
