The news: Klarna partnered with Qatar Airways, bringing installment plans to checkout for the gulf state airline in 17 European markets.

This partnership was facilitated through Klarna’s tie-up with Worldpay. 

Why this matters: Airfare is an enticing volume opportunity for buy now, pay later (BNPL) providers. 

However, many BNPL firms lack integrations with major airlines that place their buy buttons at checkout, making it increasingly unlikely that consumers will transact with their products—unless they possess a Klarna, Affirm, or Zip card. Integrating into Qatar’s checkout gives Klarna a better chance of capturing more younger consumers’ spend, who tend to view BNPL favorably.

Rewards wars: While installment plans lower the barrier for cash-strapped customers, credit cards still hold the trump card for travelers. Credit cards can offer both lucrative travel rewards and their own card-linked installments—in some cases designed specifically for travel. 

PayPal has come closest to countering credit cards’ rewards dominance, with its latest Pay Monthly campaign offering 5% cash back for in-store and online purchases made through its app. 

Our take: Pursuing tie-ups with big names like Qatar Airlines is a step in the right direction.

However, the winning formula for BNPL platforms may be strategic partnerships with airlines without a branded credit card live in certain markets. Qatar holds a branded credit card offering in the US, where it likely encourages US consumers to spend on its card. European consumers, on the other hand, can’t access that credit product, giving Klarna an opportunity to fill that gap for fliers. With this vacuum, BNPL providers can reap the benefit of not having to directly compete against credit cards’ rewards packages.

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