What: M&S has partnered with Klarna to offer interest-free pay-in-three across M&S.com and its app, joining more than 1.2 million merchants working with the provider.

Why it is important: Pay-in-three is becoming a standard checkout feature at major UK retailers, at a time when stricter BNPL regulation and Klarna's credit losses are raising the cost of getting flexible payments wrong.

M&S has added flexible payments provider Klarna to its checkout options, allowing customers shopping through its website or app to split the cost of a purchase into three equal, interest-free payments.

M&S director of financial services Katherine Carlson said the retailer is always looking for ways to make it easier for customers to shop with it, and that the launch offers more flexibility in how they pay for the things they love. She added that people deserve flexibility without paying interest, with the goal of meeting customers wherever they shop.

Klarna head of UK, Ireland, Western and Southern Europe Raji Behal described M&S as a much-loved British brand delivering outstanding quality and value to millions of shoppers daily. Behal added that Klarna is proud to offer M&S customers a transparent way to spread the cost, with no interest and a clear end date.

M&S joins more than 1.2 million merchants that partner with Klarna.

IADS Notes: Klarna's addition at M&S comes as instalment payments move deeper into mainstream retail. Mobile apps combining BNPL and cash-back rewards, with Klarna among the providers, were already central to holiday spending and to engaging younger shoppers (Forbes, November 2025), and a Klarna-powered leasing programme now runs across Apple's US online, app and store channels (Press Release, July 2026). Retailers are also treating financial services as a strategic lever, with John Lewis Money having expanded its credit, insurance and instalment finance offer to support loyalty and diversify revenue (Retail Week, September 2026). The model carries growing risks, however. Klarna's valuation has fallen by almost 70% since its IPO, with a reported $273 million net loss for 2025 and credit loss provisions up nearly 60% (Financial Times, February 2026), while UK BNPL comes under full FCA oversight from July 2026, with affordability checks on every transaction expected to add friction at checkout for credit-reliant shoppers (Retail Insight Network, February 2026).

M&S introduces Klarna at checkout