When you’re buying a pricey sofa or a kitchen cabinet set from Ikea, you can pay for it in installments. Now, you can also buy smaller items—like rugs and lamps—and pay for them later.
Today Ikea’s parent company, Ingka Group, announces it is investing more than $20 million in a company called Jifiti, which provides “buy now, pay later,” among other financial services. According to a statement by Ingka, the new deal with Jifiti provides customers the option of buying Ikea products and paying them off over time. It is part of a broader trend in the retail space, as companies like Klarna, Affirm, and Afterpay make it easier for customers to make impulse purchases and worry about paying later. But are these services really better for customers in the long term?
Jifiti was founded in 2012 as a company that enabled retailers to offer gift card and registry services; Ikea and Nike were among its early customers. But Yaacov Martin, cofounder and CEO, says it quickly became clear that there was a big opportunity to provide financial services to its retail partners. Today, Jifiti’s main business is offering lending services to customers when they make a purchase at a retailer. Jifiti provides the technology that enables these transactions, but allows the retailer to wrap the experience in its own branding. So when you choose “buy now, pay later” at Ikea, it will look like Ikea is offering the service.Fast Company