Commonwealth Bank of Australia (CBA) has announced it will invest an additional $200 million to help Swedish-based Klarna Group jointly fund its Australian and New Zealand business.
The latest funding amount brings CBA's total investment in Klarna Group to $300 million and its shareholding to 5.5%, up from its initial 1.8% stake following CBA's initial $100 million investment announced last August.
As part of this investment, CBA and Klarna will now have 50:50 ownership rights to Klarna's Australian and New Zealand business, which is expected to rival credit payment service Afterpay. CBA will also have a right to partner with Klarna in Indonesia.
According to CBA, the additional investment will help Klara Group increase its "strategical alignment, bring additional rights, and gain exposure to Klarna's international growth".
"By partnering with Klarna, we are bringing together our market-leading digital technology, merchant relationships, and strong customer network with Klarna's innovative payments technology and integrated shopping experience for the benefit of CBA customers and many more Australian consumers," CBA chief executive Matt Comyn said.
The bank has added that from Thursday, Klarna will be accessible via the CommBank app where customers will be able to register and shop online using the payments platform. Purchased items will show up in the CommBank app, as will details about product price drops and out of stock notifications from Klarna.
Klarna can also be accessed by non-CBA consumers directly through the Klarna app or website.
"Our partnership with Klarna will further enhance the customer experience in our leading banking app and address the rapidly growing demand among consumers for new payment options," Comyn said.
This investment follows on from Comyn's pledge last October that the bank would invest more than AU$5 billion in technology over the next five years to "keep improving our systems and services, to help keep our customers safe and secure, and to serve them better".