At Money20/20 Europe in Amsterdam, Visa announced plans to launch a pilot for FDIC-insured debit card with Klarna, and roll out Zilch’s first physical card.
At Money20/20 Europe, David Sandstrom, chief marketing officer at Klarna, and Mathieu Altwegg, SVP product and solutions for Visa Europe, spoke on the innovative partnership.
Sandstrom explained the purpose of the new card: “It enables people to use Klarna on a piece of plastic everywhere, online and in-person. But it's also a product proposition that resonates well with people who, to some extent, fear the traditional credit cards and revolving credit where everything is put on that credit bill.”
He stated that the card will allow users to make a purchase as usual with a card at checkout and it will be integrated into the Klarna ecosystem, that will allow them to choose their payment options, such as Pay in 4 and Pay Later.
“It enables the smart, flexible payments and BNPL features of Klarna, powered by the advanced technologies of Visa. That means that we'll get to see the perfect mix for people using it on an everyday basis, for everyday purchases, when needed,” Sandstrom said.
Altwegg added that the card is consumer-centric and can be used across the Visa network of over 150 million merchants. He detailed: “If the consumer wants to pay now, if they want to pay later, if they want to pay in installments, if they want to pay with multiple currencies, or if they want to be with their favorite currency or loyalty points, all of that is enabled on a single platform. Ultimately, the consumers want to make responsible choices when it comes to managing their finance and their everyday lives, and you can also see how the proposition can typically evolve over their life stages.”
The card is being rolled out in the US, where there are already five million consumers on the waitlist to access it. Sandstrom added that the card will appeal to the 100 million Klarna users who are looking for flexible, accessible payments.
Zilch offers Visa-backed flexible payments card
In the panel session ‘From disruption to integration: What's driving the new financial order?’, co-founder and CEO of Zilch, Philip Belamant, announced their partnership with Visa to release Zilch’s first physical card, emphasising the innovative flexibility behind the card and partnering with “the original fintech”.
Belamant stated that Zilch has 5 million customers, growing by around 100,000 a month, and explained the versatility of the new model: “These cards used to be a credit card, a debit card, a prepaid card, a charge card - that doesn't exist anymore, and Visa has been leading the way in some of this. Credentials, in other words, this just identifies who you are. Through our app, you can choose whether that's a debit, credit, or deferred debit transaction. You could do it before. You can do that after. You can change your mind. What we weave into this then is the ad engine that allows you to get all of the benefit of that ad revenue we generate each and every time you swipe.”
Lucy Demery, senior vice president of commercial solutions in Europe at Visa, stated that there has been massive progress in the industry in the last year, citing that 69% of listed fintechs are profitable. Demery highlighted how Zilch is the fastest growing unicorn in EMEA, and that as an industry we are in a new stage of convergence of traditional financial institutions and fintech that is primed to take on greater challenges.
Demery added: “We're also looking to open up Visa as more of a Visa-as-a-service, so giving our partners access to our capabilities, our network, our rails, but also our data and analytics and software, and put it at their disposal. It's more of an open ecosystem.”