There's Nothing Novel About the DoorDash-Klarna Collaboration

Consumers have long paid for daily goods with loans.

DoorDash announced on Thursday its partnership with Klarna, a Swedish fintech firm that provides online financial services, to offer a "flexible range of payment options to DoorDash customers." American DoorDash Marketplace customers can now choose the Klarna option at checkout, which offers three options: Pay in Full, which functions like any other payment processor; Pay in 4, which "allows customers to pay in four equal interest-free installments"; and Pay Later, which "allows customers to defer payments to a more convenient time."

Klarna's chief commercial officer, David Sykes, described the partnership as expanding convenience to millions of Americans "by offering smarter, more flexible payment solutions for groceries, takeout, and retail essentials."

Many X users were less enthusiastic about the team up. One post said integrating Klarna's payment services into DoorDash is "a collab fresh from the gates of hell." Other posts joking about financing a pizza from Domino's, paying off a Starbucks drink over the course of a year, and "Collateralized Burrito Obligations" received millions of views and tens of thousands of likes.

Though much of the public reaction framed Klarna's integration into DoorDash as a novel instance of financing, that's not quite accurate. Consumers already finance food delivery, groceries, and other kinds of routine purchases using credit cards, paying off their balances at the end of the month rather than at the point of sale. Upgraded Points, a travel-focused website, found that over 20 percent of participants in its 2023 food delivery survey "pay for their deliveries with a credit card that rewards such purchases." And unless the entire balance is paid off by the end of the month, the cardholder owes not only the remaining principal, but interest as well.

DoorDash Marketplace isn't limited to groceries and food delivery either; it also includes electronics, home improvement supplies, and beauty products, according to the official announcement. And even if an installment payment is missed, the aggregate sum of late fees "will never exceed 25% of your order value at the time of purchase," according to Klarna. This is only two percentage points higher than the average credit card interest rate of about 23 percent.

The DoorDash-Klarna collaboration gives Americans the ability to smooth their consumption spending just as credit cards do. It's wise to be cautious about assuming consumer debt, but there are myriad other ways to finance personal consumption besides Klarna.