CBA Invests in E-Commerce App Klarna

The Commonwealth Bank of Australia invested a total of $200 million in a Swedish buy now, pay later service Klarna. CBA users will be the first to try the service by connecting their accounts to the service’s app.

CBA now holds 5.5 percent of the company, up from its initial 1.8 percent stake the year before. The bank initially invested $100 million in August, then added $5.5 billion to gain additional rights and exposure.

Klarna lets shoppers pay for purchases in four equal installments with no interest or fees for on-time payments.

Australians expect more seamless, intuitive, and transparent online shopping services that suit their needs. The companies’ partnership was from “a shared obsession with good digital experiences,” says Klarna co-founder and CEO Sebastian Siemiatkowski.

In December, Siemiatkowski said the company added about six million new customers each year.

The CBA CEO Matt Comyn said market-leading digital tech, merchant relationships, and strong customer network can deliver innovative services to Australians.

CBA on Smaller Businesses

CBA disclosed its efforts to help small businesses in the region based on customer feedback, including faster access to funding. An executive in business customer solutions said smaller businesses are often first to “feel the pinch” in broader economies.

Clive van Horen added that this community generally has a hard time accessing credit. The bank can lend more than $500m to Australian businesses every week, but they can do more.

As part of the effort, the bank launched BizExpress to provide eligible small businesses a lending decision with faster funding. The app funds up to $1 million in minutes.

Van Horen explained that these types of customers require quick access to funding for plenty of reasons. Some capitalize on opportunities, some cover debts or cash flow, and others purchase equipment.

With a larger pool of business bankers in the nation’s phone-based business centers, CBA created more than 120 new roles. They also added more managers in prominent branches.