As many an international traveler has found out, Germany still has a love affair with real cash, and that can mean hitting a brick wall if you try to use a credit card for making day-to-day purchases.
Present your American Express in a cafe or supermarket, and you’ll be quickly scorned at. Don’t expect Germans to be impressed by your metal AmEx Platinum or Black card.
The complicated relationship with credit means that many Germans have never bothered to get a credit card. You either have the money to buy something or, well, you don’t.
That, then, surely makes German airline Lufthansa the perfect candidate to implement a ‘buy now, pay later’ service for booking flights – essentially, a credit agreement for paying off a big ticket purchase like a flight in chunks, just like you would a credit card.
Buy now, pay later services (or BNPL as the industry refers to itself) have been growing in popularity for years. Commonly used by clothing retailers appealing to a younger clientele with big credit card limits, BNPL is slowly expanding its reach.
In the last few years, we’ve seen several airlines add a BNPL later option – Qantas was one of the first in 2022, although that’s probably not surprising given how Australia has embraced BNPL so enthusiastically.
Lufthansa is partnering with one of the original BNPL providers, Klarna, which will help offer the service to the airline’s customers in Germany, Austria, Belgium, and Switzerland.
The tech was rolled out on a limited basis in mid-November, but Lufthansa plans to expand the option across its group airlines, including Austrian Airlines, Brussels Airlines, and SWISS.
Lufthansa will offer two options. The first is to book a ticket right now and pay it off in one lump sum at a later date. The second option is a financing agreement, in which passengers pay off the ticket in smaller chunks over a longer period.
It should be noted, however, that this is simply a payment option. Lufthansa isn’t offering passengers the ability to earn frequent flyer points when they use Klarna, as Qantas does through its own BNPL program.
Smart travelers will know to use airline-specific or transferable points-based credit cards when booking airplane tickets, but airlines have the booking data to realize that no matter how much they try, the vast majority of passengers aren’t going to sign up for their cobranded credit card.
At the same time, passengers are demanding more flexible options when they research their travel needs, and BNPL could be one way to get a passenger to choose Lufthansa over a rival carrier that wants the full ticket cost paid straight away.
