Photo credit: www.eater.com
In a concerning development for consumers, digital financing firm Klarna has announced a partnership with DoorDash, enabling customers to finance their meals. In a climate where fears of an economic downturn are prevalent and wage growth is stagnant, this move raises significant concerns.
For those unfamiliar, Klarna is a financial technology platform that allows users to divide their purchases into four manageable payments. Much like services such as Afterpay or PayPal’s Pay In 4, Klarna does not charge interest, with payments typically due every two weeks. For instance, if a consumer orders $100 worth of food, they can pay $25 every two weeks for two months. Klarna profits by charging merchant fees to businesses like DoorDash and Target, taking a cut from every order processed through its system. According to NBC News, Klarna’s collaboration with DoorDash will allow consumers to sync payments with their paydays for convenience.
Klarna’s engagement with DoorDash is part of a broader trend; in 2024, Instacart integrated Klarna into its services, facilitating payment installment options for grocery bills. Target has also been associated with Klarna since 2022, and Uber, through its UberEats service, joined forces with Klarna in 2024. This approach comes amidst a backdrop of rising food prices, which have surged by 31 percent since 2019. As consumers feel the tightening of their food budgets, financing a high-end meal may begin to resemble financing other big-ticket items.
The trend of financing food purchases poses troubling economic implications. In 2023, a report by the USDA noted that 13.5 percent of American households faced food insecurity, making them particularly susceptible to Klarna’s assertion that its payment plans provide a preferable alternative to high-interest credit cards. However, the “buy now, pay later” (BNPL) sector lacks the regulatory oversight seen in the credit card industry, which heightens the risk of consumer exploitation.
Moreover, access to BNPL services can lead to increased debt. A 2025 analysis by the Consumer Financial Protection Bureau revealed that users of platforms like Klarna and Afterpay often take out multiple loans simultaneously, resulting in deeper financial troubles compared to non-users. While it might not be a popular opinion, providing unsecured credit to individuals who are already financially strained appears to create a precarious situation that could entrap them in cycles of repayment.
The reality that consumers could end up making payments two months after consuming food is alarming. Traditional credit cards do allow for deferred payments, but they can also contribute positively to a credit score if managed wisely—a benefit not offered with Klarna’s payment model. While dining out may often be construed as a luxury, the need for food delivery can be genuine for some, whether due to illness or other physical constraints that prevent grocery shopping.
Understanding the desire for small indulgences during financially challenging times elucidates why many consumers might welcome Klarna’s option on DoorDash. Facing a limited budget on a Tuesday evening could make the prospect of a delayed payment for a meal enticing. Yet, such decisions can lead to significant debt, as personal experiences demonstrate the pitfalls of impulsive spending. As the industry continues to innovate in ways that encourage debt accumulation, it becomes increasingly crucial for consumers to navigate these offerings with caution.
Source
www.eater.com