Riding the Wave of Payments Innovation

Klarna files for an IPO, Jack Henry partners with Mastercard, a bipartisan push aims to cap credit card interest rates, and AmEx reveals the latest trends in B2B payments.

Welcome to Today in Payments, I’m your host, Patti Murphy, here with your daily dose of payments notes.

Klarna Files for IPO

Klarna, the Stockholm-based financial services firm best known for its buy now, pay later (BNPL) offering, has filed paperwork with the Securities and Exchange Commission (SEC) for an initial public offering (IPO).

Klarna aims to raise at least $1 billion through the IPO, targeting a valuation of more than $15 billion, according to Bloomberg News. Analysts valued the company at approximately $14.6 billion in October 2023.

The SEC filing reveals that Klarna has 93 million active customers and works with over 675,000 merchants. That number is expected to rise as Klarna replaces Affirm as the exclusive BNPL provider at Walmart. Klarna is partnering with OnePay, a fintech backed by Walmart and venture capital firm Ribbit Capital, to support this project. OnePay already offers financial services to Walmart customers and associates through the retailer’s physical and digital platforms.

Jack Henry Partners with Mastercard on Moov

Jack Henry has announced an extended collaboration with Mastercard to offer its financial institution clients access to Mastercard Moov.

Moov is Mastercard’s portfolio of money transfer solutions. It will now be available to banks and credit unions through Jack Henry Rapid Transfers, a cloud-native service that enables near real-time money movement.

Capping Credit Card Rates

It might seem unlikely, but Senator Bernie Sanders, one of the most liberal members of the U.S. Senate, and Senator Josh Hawley, a staunch conservative, agree on at least one thing: credit card interest rates are too high.

The two senators have introduced a bill to cap credit card annual percentage rates (APRs) at 10%. A similar bill has been introduced in the U.S. House by Congresswomen Alexandria Ocasio-Cortez (D-NY) and Anna Paulina Luna (R-FL).

“During the election campaign, President Trump pledged to cap credit card interest rates at 10%. We're making that pledge more than a talking point by introducing legislation to protect working people from remaining trapped under mountains of debt,” said Ocasio-Cortez. Hawley echoed the sentiment, stating, “Working Americans are drowning in record credit card debt while the biggest credit card issuers get richer and richer by hiking their interest rates to the moon. It’s not just wrong, it’s exploitative. And it needs to end.”

Trade associations representing banks and credit card issuers are lobbying against the bill, arguing it would reduce access to credit for millions and drive consumers toward higher-cost alternatives, such as payday loans and pawn shops.

While the bill faces steep opposition, the debate over credit card interest rates continues, especially with the backdrop of the President’s campaign promise. Still, the chances of passage remain uncertain.

AmEx: Businesses Eye B2B Payment Improvements

A recent survey of 1,000 business executives conducted by American Express highlights opportunities to improve B2B payments and enhance business relationships.

Key Findings:

• 91% of business decision-makers say that easy, streamlined, and secure payments drive business growth.
• 26% cite late or slow payments as a common reason for ending relationships with buyers or suppliers.
• Only 17% have fully automated their payment processes.

According to Widad Chaoui, Senior Vice President at AmEx, automated payment methods like virtual cards and digital push payments improve cash flow visibility, enhance security, and provide greater working capital flexibility.

So why aren’t more businesses automating payments? Surveyed decision-makers cited cost (45%), uncertainty about benefits (28%), and security concerns (26%) as primary barriers.

Despite these challenges, 95% of business decision-makers believe that streamlined payments create happier customers. Among those planning to update their payment processes in 2025, 43% say driving business growth is their top motivation.

Benefits of Payments Automation:

• Automating accounts payable (AP) and accounts receivable (AR) systems
• Using and accepting credit cards, both physical and virtual
• Leveraging digital push payments, such as ACH transfers, to enhance transaction control

Closing Thoughts

That’s it for today in payments! Keep coming back every weekday for your daily dose of payments notes.