Petco will begin offering its customers a buy now, pay later (BNPL) option with the help of the Swedish BNPL company Klarna, the pet supply chain said on Thursday (Aug. 5). The new payment option lets pet parents split their purchases into four interest-free installments, paid off over the course of six weeks.
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Petco Chief Digital and Innovation Officer Darren MacDonald said the arrangement will let customers care for their pets, “whether they’re welcoming a new family member, caring for a pet’s unique health needs or restocking on the basics.”
Petco points to figures from industry forecasts that show the $119 billion pet industry growing at an 8 percent compound annual growth rate (CAGR) over the next five years.
“Millennials and Gen Zers, who have been spending more on their furry family members, not only represent the majority of recent growth, but 65 percent of 18- to 34-year-olds indicate they plan to acquire or add a pet in the next five years,” the company said in a news release.
The Klarna option, which will become available later this year, can be applied to both merchandise and services (except for recurring payments, mobile vaccinations and partner vet hospitals) and won’t affect customers using their Pals Rewards accounts to earn points.
This is the latest in a series of partnerships between Klarna and high-profile retail brands. As PYMNTS reported in May, the company has inked deals with Authentic and SPARC, whose brands include Aéropostale, Brooks Brothers, Nine West and Nautica.
“Our partnership with Klarna provides access to payment options we know our shoppers want to see and has resulted in a significant uptick in average order value,” SPARC Group Chief Digital Officer Mike Dupuis said at the time.
In June, Klarna landed $639 million in venture funding, a deal that values the company at $45.6 billion. Klarna has called itself “the highest-valued” privately-held FinTech in Europe.