Dive Brief:

• Buy now, pay later company Klarna will soon let shoppers convert completed debit card purchases to installment loans.
• Klarna is rolling out the feature alongside fintech OnePay, which is backed by retail behemoth Walmart. Consumers who use the feature in OnePay's smartphone app can get their money back on a recent transaction and then repay it over time as an installment loan, according to a Tuesday news release.
• The idea behind the offer is to give consumers more flexibility, David Sykes, Klarna’s chief commercial officer, said in the release. “It's another step in expanding smarter payment options and meeting consumers wherever they choose to pay,” he said. 

Dive Insight:

The feature, called "Swipe to Finance" and powered by Klarna, will be available “in the coming months,” the release said, without being more precise. A Klarna spokesperson declined to be more specific about timing in an emailed statement Wednesday.

OnePay users can convert their recent purchases into installment loans anywhere its debit card, which is tied to Mastercard, is accepted, the spokesperson said.

The fintech offers debit and credit cards as well as deposit accounts. OnePay Cash is a deposit account into which consumers can deposit money, or from which they can withdraw money.

The release did not say if the installment loans will be the BNPL industry’s traditional pay-in-four installment financing that is repaid over a few weeks and doesn’t accrue interest, or longer-term, interest-bearing loans.

Spokespeople for Klarna and OnePay did not immediately respond to a series of follow-up questions, regarding whether they will make money through interchange fees or from interest income, and whether there would be a time limit on converting a purchase to an installment loan. 

Klarna offers short-term, interest-free installment loans, but also provides longer-term, interest-bearing financing options.

The company, which was founded in Stockholm, has made a series of moves in recent years to better compete with banks, such as offering deposit accounts and a debit card.

Klarna also refers to itself as a "global digital bank" in its news releases.