Klarna gives select small retailers a big break

A global retail bank, payments and shopping service is suspending payment fees and providing free marketing to assist small-to-mid-sized businesses (SMBs).

The newly launched Klarna Small Business Impact Initiative rewards recipients a portion of $4.5 million in Klarna services, including one year of fee-free payments and $40,000 of free media that extends marketing exposure across the company’s ecosystem.

According to Klarna, it designed the program to helps SMBs recover from a loss of business due to the COVID-19 pandemic. Over the coming weeks, 100 small businesses will be selected, located throughout the U.S. and spanning the health & beauty, home & garden, jewelry & accessories, fashion, food & beverage, electronics, and entertainment industries. Many recipients include minority-owned and female-led businesses that were most impacted by the pandemic.

[Read more: Study: ‘Buy-now-pay-later’ usage set to explode]

“Small businesses were among the hardest hit during the pandemic, facing higher rates of store closures, layoffs, and financial hardships, while competing with behemoth shopping sites taking a huge chunk of retail profits,” said David Sykes, head of North America, Klarna. “As Americans head back into stores and continue to shop online, we are proud to dedicate resources to help small businesses offer flexible payment solutions that meet customer demand and reach Klarna’s network of more than 18 million U.S. shoppers to further drive sales and marketing.”

“Like many small businesses across the U.S., COVID challenged our business operations and logistics,” said Sarah Li, co-founder and chief creative officer of specialty skincare brand Element Mom, a Klarna Small Business Impact Initiative recipient. “Costs surged everywhere across the supply chain, eating up margins, and instead of passing the buck to the consumer, we scaled back on marketing and delayed certain investments. Being a recipient of the Klarna Small Business Impact Initiative gives our business a big boost with ad spend, while also allowing us to leverage buy now, pay later payment solutions as a strategy for customer acquisition and increasing our average order value."