DoorDash Introduces Buy Now, Pay Later for Fast Food in Partnership With Klarna
DoorDash users will soon have the option to Buy Now, Pay Later (BNPL) for their meals, following a new partnership between the food delivery giant and Klarna, a financial service that allows payments to be split into smaller installments.
Announced on Thursday, the collaboration will enable customers to pay in four interest-free installments or defer payments to align with their paychecks, according to a press release from the companies.
BNPL services, traditionally used for larger purchases like electronics and furniture, have seen rapid adoption across various industries. The introduction of the feature for fast food purchases, however, raises concerns about consumer debt levels, as BNPL usage surges across the U.S.
During the 2023 holiday shopping season, BNPL transactions hit a record high, accounting for more than $18 billion in online spending, a 10% increase from the previous year, according to Adobe Analytics. The option is particularly popular among younger consumers looking for ways to stretch their budgets.
Economists and consumer advocates warn that while BNPL services appear convenient, they lack regulatory oversight and may be contributing to rising household debt. A Federal Reserve Bank of New York report found that U.S. debt levels reached $18.04 trillion in the fourth quarter of 2023, with delinquency rates on auto loans and credit cards hitting 14-year highs.
For Klarna, the partnership comes amid its expansion efforts ahead of a planned New York Stock Exchange listing. The Swedish fintech company recently reported a 24% surge in revenue, capitalizing on the growing BNPL market, which is projected to exceed $160 billion in the next seven years.
DoorDash, which already offers BNPL options for high-ticket items from retailers like Best Buy and The Home Depot, is now extending the feature to food orders – signaling a shift in how consumers finance everyday expenses.
