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Glen Okun of NYU business school has written about BNPL loan portfolio weakness. The AI marketing is just an attempt to reframe the value narrative of the comp

Glen Okun of NYU business school has written about BNPL loan portfolio weakness. The AI marketing is just an attempt to reframe the value narrative of the company before IPO. They would rather be seen as an AI company than an unsecured lender of last resort. The narrative on Klarna’s core business is not good in any case, either an extractive lender benefiting from people buying what they may not afford and charging exorbitant interest or a lender of last resort who has not properly underwritten the risk in their portfolio. Neither is preferential to them compared to a value narrative framing them as an AI company. Likely the market is too skeptical in this environment to take the bait however.

blibble 1y ago
> a lender of last resort who has not properly underwritten the risk in their portfolio. I thought they more or less instantly offloaded the risk as asset backed securities to clueless people who didn't know the actual risk profile what they were buying sound familiar?
spaceman_2020 1y ago
I can't believe it takes b-school professors to figure out that people financing their DoorDash might not be the best people to lend money to.
- rchaud 1y ago
  This is the primary positioning tactic used across the startup industry . Uber isn't a taxi app, it's actually the "future front end for millions to access autonomous transport". Doordash isn't a delivery app, it's an "on-demand logistics" platform. Similarly, Klarna isn't a shady payday loan company, it's an "AI-first consumer finance play".
  - Avicebron 1y ago
    > "AI-first consumer finance play" In a more civilized time, saying this was your plan would get you chucked feet-first into a wood chipper.
    - runlaszlorun 1y ago
      oh I think we're heading back that way slowly...
    - dcsan 1y ago
      The addition of "feet first" made this much more evocative!
  - spaceman_2020 1y ago
    Heard a new term yesterday: “private credit”. Lenders that give unsecured loans to businesses at high interest rates We just used to call them loan sharks
- dagw 1y ago
  Not that I necessarily disagree with your overall take, but can someone explain how 'financing' your DoorDash order with a credit card is perfectly OK, but financing with Klarna is somehow dubious and shady. Surely the problem is buying stuff you cannot afford, not how you choose to buy it.
  - twosdai 1y ago
    This is a great comment and comparison. I think there is a feeling that klarna, and other bnpl companies just lend without checking or caring of consumer credit, or buying power. I've never used them before, so I don't know if this is a case. With credit cards there is the "appearance" of them checking credit scores, ability to pay , etc.. before giving a credit card. I say appearance, because as we all know cc companies will just lend cards to anyone, and then charge huge interest rates. Ultimately it's another form of credit, and it's a minor change on the current system. But since it's finance and lending, it's a step to make lending easier.
    - IlPeach 1y ago
      Lending and banking in general is a highly regulated market so they do have to underwrite and do anything in their power to avoid lending money or start contractual obligations with people that are bad creditors. Source: worked for them for 2 years.
Freak_NL 1y ago
They are scum, and currently are suffering from increased scrutiny from governments for pushing their buy-now-pay-later exploitative business everywhere. In the Netherlands they are even attempting to gain access to brick-and-mortar stores by partnering with Adyen¹ which provides the payment solutions, but the government is being vocal about that being unwanted. This is in addition to the unabating coverage in the media about how Klarna is about as harmless as vaping — that is, they are enticing young people into buying stuff they don't need² before they can afford it. Shopkeepers don't want it, but fear they must if big chains start offering it, just as online shops feel like offering it is unavoidable due to the popularity in certain demographics. The financial watchdog doesn't like Klarna, and is increasing scrutiny³. If Klarna has trouble marketing their value, then that at least is good news, but not unsurprising given the spate of attention it received over the last two years. 1: So much for the ethical side of Adyen (e.g., https://www.adyen.com/impact https://www.adyen.com/impact sounds hollow when you partner with loan sharks). 2: Some people are quick to defend Klarna for offering people a chance to buy their necessities with what amounts to a payday loan, but that is bullshit. Klarna predominantly is not used for daily necessities. 3: Klarna now has to state that they are offering a loan in the Netherlands where they are available as payment option, with the mandatory "borrowing money costs money" tag-line.
- nikanj 1y ago
  Shopkeepers do want it, because it expands their market from those with funds to also those without. Klarna carries the lending risks, for the shopkeeps it’s a risk-free customer base
  - returnInfinity 1y ago
    that's the short term, if everyone starts to default, something is going to break and come back to the shop keeper.
  - Freak_NL 1y ago
    In the Netherlands no less than twenty trade associations sent letters to the government on behalf of their shopkeeper members urging legal action to prevent Klarna from coming. Part of it is that Klarna is fairly expensive compared to the common payment methods (i.e., cash and debit cards). Klarna charges a whopping 4% of the purchase price, whereas using a debit card (perhaps 95% of payments in physical shops) costs a fixed 17 euro cents, and cash costs just the costs of keeping it around safely and getting it to the bank. But there is also the realisation that a customer who uses BNPL today, won't be coming back next month when they are paying off their loan. Dutch shopkeepers do not want Klarna, but if major chains like Primark etc. do it, they fear customers will start expecting it.
subtlesoftware 1y ago
If you default on your Klarna loan, you could pay them back in support hours: > The pilot has started small, with two of the new breed of customer-service agents live now, but the ambition is to tap into candidates such as students or rural populations. “We also know there are tons of Klarna users that are very passionate about our company and would enjoy working for us,” he added. [from the bloomberg article: https://www.bloomberg.com/news/articles/2025-05-08/klarna-turns-from-ai-to-real-person-customer-service https://www.bloomberg.com/news/articles/2025-05-08/klarna-tu...]
- kaliszad 1y ago
  Here is an archive of the article: https://web.archive.org/web/20250512120733/https://www.bloomberg.com/news/articles/2025-05-08/klarna-turns-from-ai-to-real-person-customer-service https://web.archive.org/web/20250512120733/https://www.bloom...
dreamcompiler 1y ago
WeWork tried this and it worked out great for their CEO. They were a real estate landlord masquerading as a tech company. Stupid SoftBank bought that lie and made Neumann filthy rich. But as you say that was ZIRP when everybody was stupid and this is now.

blibble 1y ago

> a lender of last resort who has not properly underwritten the risk in their portfolio. I thought they more or less instantly offloaded the risk as asset backed securities to clueless people who didn't know the actual risk profile what they were buying sound familiar?

spaceman_2020 1y ago

I can't believe it takes b-school professors to figure out that people financing their DoorDash might not be the best people to lend money to.

rchaud 1y ago
This is the primary positioning tactic used across the startup industry . Uber isn't a taxi app, it's actually the "future front end for millions to access autonomous transport". Doordash isn't a delivery app, it's an "on-demand logistics" platform. Similarly, Klarna isn't a shady payday loan company, it's an "AI-first consumer finance play".
- Avicebron 1y ago
  > "AI-first consumer finance play" In a more civilized time, saying this was your plan would get you chucked feet-first into a wood chipper.
  - runlaszlorun 1y ago
    oh I think we're heading back that way slowly...
  - dcsan 1y ago
    The addition of "feet first" made this much more evocative!
- spaceman_2020 1y ago
  Heard a new term yesterday: “private credit”. Lenders that give unsecured loans to businesses at high interest rates We just used to call them loan sharks
dagw 1y ago
Not that I necessarily disagree with your overall take, but can someone explain how 'financing' your DoorDash order with a credit card is perfectly OK, but financing with Klarna is somehow dubious and shady. Surely the problem is buying stuff you cannot afford, not how you choose to buy it.
- twosdai 1y ago
  This is a great comment and comparison. I think there is a feeling that klarna, and other bnpl companies just lend without checking or caring of consumer credit, or buying power. I've never used them before, so I don't know if this is a case. With credit cards there is the "appearance" of them checking credit scores, ability to pay , etc.. before giving a credit card. I say appearance, because as we all know cc companies will just lend cards to anyone, and then charge huge interest rates. Ultimately it's another form of credit, and it's a minor change on the current system. But since it's finance and lending, it's a step to make lending easier.
  - IlPeach 1y ago
    Lending and banking in general is a highly regulated market so they do have to underwrite and do anything in their power to avoid lending money or start contractual obligations with people that are bad creditors. Source: worked for them for 2 years.

Freak_NL 1y ago

They are scum, and currently are suffering from increased scrutiny from governments for pushing their buy-now-pay-later exploitative business everywhere. In the Netherlands they are even attempting to gain access to brick-and-mortar stores by partnering with Adyen¹ which provides the payment solutions, but the government is being vocal about that being unwanted. This is in addition to the unabating coverage in the media about how Klarna is about as harmless as vaping — that is, they are enticing young people into buying stuff they don't need² before they can afford it. Shopkeepers don't want it, but fear they must if big chains start offering it, just as online shops feel like offering it is unavoidable due to the popularity in certain demographics. The financial watchdog doesn't like Klarna, and is increasing scrutiny³. If Klarna has trouble marketing their value, then that at least is good news, but not unsurprising given the spate of attention it received over the last two years. 1: So much for the ethical side of Adyen (e.g., https://www.adyen.com/impact https://www.adyen.com/impact sounds hollow when you partner with loan sharks). 2: Some people are quick to defend Klarna for offering people a chance to buy their necessities with what amounts to a payday loan, but that is bullshit. Klarna predominantly is not used for daily necessities. 3: Klarna now has to state that they are offering a loan in the Netherlands where they are available as payment option, with the mandatory "borrowing money costs money" tag-line.

nikanj 1y ago
Shopkeepers do want it, because it expands their market from those with funds to also those without. Klarna carries the lending risks, for the shopkeeps it’s a risk-free customer base
- returnInfinity 1y ago
  that's the short term, if everyone starts to default, something is going to break and come back to the shop keeper.
- Freak_NL 1y ago
  In the Netherlands no less than twenty trade associations sent letters to the government on behalf of their shopkeeper members urging legal action to prevent Klarna from coming. Part of it is that Klarna is fairly expensive compared to the common payment methods (i.e., cash and debit cards). Klarna charges a whopping 4% of the purchase price, whereas using a debit card (perhaps 95% of payments in physical shops) costs a fixed 17 euro cents, and cash costs just the costs of keeping it around safely and getting it to the bank. But there is also the realisation that a customer who uses BNPL today, won't be coming back next month when they are paying off their loan. Dutch shopkeepers do not want Klarna, but if major chains like Primark etc. do it, they fear customers will start expecting it.

subtlesoftware 1y ago

If you default on your Klarna loan, you could pay them back in support hours: > The pilot has started small, with two of the new breed of customer-service agents live now, but the ambition is to tap into candidates such as students or rural populations. “We also know there are tons of Klarna users that are very passionate about our company and would enjoy working for us,” he added. [from the bloomberg article: https://www.bloomberg.com/news/articles/2025-05-08/klarna-turns-from-ai-to-real-person-customer-service https://www.bloomberg.com/news/articles/2025-05-08/klarna-tu...]

kaliszad 1y ago
Here is an archive of the article: https://web.archive.org/web/20250512120733/https://www.bloomberg.com/news/articles/2025-05-08/klarna-turns-from-ai-to-real-person-customer-service https://web.archive.org/web/20250512120733/https://www.bloom...

dreamcompiler 1y ago

WeWork tried this and it worked out great for their CEO. They were a real estate landlord masquerading as a tech company. Stupid SoftBank bought that lie and made Neumann filthy rich. But as you say that was ZIRP when everybody was stupid and this is now.