Klarna has made a major change to its app by launching a voluntary credit "opt out" option for those shopping through the Klarna app.
The tool, accessed through the Klarna app’s settings, enables shoppers to block the use of Klarna Pay in 30, Pay in 3 or financing products.
The new feature will allow customers to "pre-decide" not to use credit, making it easier to manage self-control when it comes to purchases as they will be blocked from using Buy Now Pay Later (BNPL) credit options.
If you chose to deactivate your credit, you will be taken to a dedicated page which provides resources and support if you are struggling with debt.
In a post on Klarna's website, the payment provider said: "Making ‘pre-decisions’ is a well-established way to manage self-control, for example, people who pre-prepare meals for the week are better at sticking to a healthy diet than those who decide what to eat each time they open the fridge."
Klarna CEO Sebastian Siemiatkowski said the decision to create the tool followed a meeting between Economic Secretary to the Treasury Andrew Griffith MP.
Sebastian said: "As a leader in responsible credit, we always put our customers’ interests first,”
“Unlike credit card companies, who push you to put all your purchases on credit, we believe that consumers should only use credit when it makes sense for them.
"That’s why I loved Andrew’s suggestion of a voluntary credit ‘opt out’, so people are in control of their finances.”
The Klarna boss took to Twitter today to share the update and called on other providers, like HSBC and Amex, to implement similar features.
He said: "Hey @BcardPayments, @AmexUK, @HSBC_UK let's all agree consumers should have the tools to switch off from credit if they feel it is not helping their financial goals. We've done it. Would love to see you guys follow suit."
The initiative has been welcomed by consumer groups which have been camapigning for stricter regulation of BNPL providers in the midst of a cost-of-living crisis.
Rocio Concha, director of policy and advocacy at consumer group Which?, said: “It’s encouraging to see a major provider helping consumers to take more control over whether they’re using credit - and other BNPL providers could follow their lead and provide consumers with more control over their spending."
The option is available in the latest version of the Klarna App - so you will need to update yours to get the feature.
In order to reactivate credit services, consumers will need to call Klarna’s customer service teams.
