Klarna partners with UATP to tap the $1 trillion air travel industry

PR Newswire
5 min read

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The partnership brings together a globally recognized BNPL provider with the most trusted name in travel payments

WASHINGTON, Sept. 10, 2024 /PRNewswire/ -- UATP, the global payment network that enables organizations to simplify payment processes and expand their payment capabilities, has announced a new partnership with Klarna, the AI-powered global payments network. The partnership allows airlines to offer Klarna's flexible payment services, including interest-free Buy Now Pay Later, providing customers with more flexible payment options for travel products and services.

UATP is a global payment solution owned and operated by the world's airlines and accepted by thousands of merchants for air, rail and travel agency payments. UATP connects airlines to Alternative Forms of Payment which can expand reach and generate incremental sales globally. UATP offers easy-to-use data tools, DataStream(SM) and DataMine(SM), which provide comprehensive account details to Issuers and Corporate Subscribers for accurate travel management. UATP is accepted as a form of payment for corporate business travel worldwide by airlines, travel agencies and Amtrak; UATP accounts are issued by: Aeromexico, APG Airlines, Air Canada, Air New Zealand, Air Niugini, American Airlines, Austrian Airlines, China Eastern Airlines, Delta Air Lines, EL AL Israel Airlines, Etihad Airways, Frontier Airlines, GOL Linhas aereas inteligentes S.A., Hahn Air; Japan Airlines, Malaysia Airlines, Qantas Airways, Shandong Airlines, Transavia Airlines, TUIfly GmbH, Turkish Airline, United Airlines, and WestJet. AirPlus International issues the UATP-based Company Account for: British Airways and Lufthansa German Airlines. (PRNewsFoto/Universal Air Travel Plan, Inc.)

UATP's collaboration with Klarna represents the convergence of two highly successful payment technology companies, with mutual benefits on the horizon. Klarna gains immediate access to UATP's vast base of airlines and travel agencies and is a preferred BNPL partner for EU and APAC.

The $1 trillion air travel sector is a key growth opportunity for Klarna because credit cards account for 70% of retail travel payments. This leads to high costs for airlines, who spend $20bn a year on payment processing, and massive interest payments for consumers. Wherever Klarna is available on a travel site, consumer adoption is very high: the total value of travel booked through Klarna has increased by 50% in the past year.

For UATP, integrating Klarna further strengthens the payment network's support for BNPL options. Offering a variety of BNPL choices helps UATP merchants tap into a global BNPL market estimated at $14.55 billion this year and is expected to grow at a CAGR of 26.50% to reach $60.47 billion by 2030.

The Convenience and Ease of BNPL from a Trusted Provider

"BNPL is an essential payment option for travel merchants to provide their customers. It offers flexibility and convenience to encourage travelers to complete transactions and boost conversion rates," says Zach Ornelas, SVP of Global Sales for UATP. "But to reap the full benefits of having this payment option, merchants need a BNPL partner that their customers know and trust. Klarna is that partner."

Klarna offers consumers a choice of ways to pay including immediate payments, short-term, interest-free BNPL and longer-term financing. Globally, about 30% of the payments Klarna processes are immediate payment.

Klarna's BNPL is a short-term, interest-free credit service with no fees when paid on time. Klarna underwrites every transaction based on strict eligibility assessments and boasts a 99% repayment rate globally. This model provides consumers with a transparent and predictable repayment structure, making it easier to manage their finances without accumulating interest.

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