News: APT Australia's Commonwealth Bank raises stake in pay-later fintech Klarna, page-23

An excerpt from the AFR this morning below: Anybody who thinks this is not a threat to Afterpays Aussie business has their head in the sand. No merchant fees (at this stage I assume). This is a freemium model, and that kind of model hits charging competitors hard.

So they have the following in Australia, and Afterpay do not:
Full Credit Checks (A regulatory danger for competitors)
No merchant fees (for now?)
No late payments (for now?)
Every retailer with a credit card machine.
Every on-line retailer.

CBA had 27% of credit card market share in 2018 (by Commbanks reckoning) - that is possibly 27% of local Afterpay business being specifically targeted by CBA/Klarna via data analytics etc.

"Klarna co-founder Sebastian Siemiatkowski told reporters in Sydney that his app allowed interest-free payment by instalment at every online retailer operating in Australia, not just those with which it may in future also negotiate an in-store deal.
A catch to this unlimited availability of BNPL via Klarna is that the online retailer's site must be visited through Klarna's in-app browser.
Using technology which Mr Siemiatkowski described as "Google Autofill on steroids", he claimed Klarna's app was able to prefill most of the information required by third-party checkouts, and create a single-use debit card which paid the merchant immediately, but allowed Klarna to take the risk on offering a 'pay in four instalments' option.
Merchants pay nothing for this service beyond standard payment scheme charges, whereas the commission clipped by a BNPL provider when it is a checkout option offered by the merchant can be as high as 5 per cent.
Mr Siemiatkowski said fees for late payments would not be charged either, although he said this policy would be reviewed.
His confidence in not enforcing late payments related to another catch of the Klarna service - that a customer has to pass a credit check before each purchase."

For more info:

https://www.commbank.com.au/digital-banking/klarna.html