STOCKHOLM | Klarna announced last week it prepares to enter the US ecommerce and payments market. Klarna has recruited several experienced US (payment) experts to head up the Klarna organisation overseas. Klarna aims to launch its pay-after-delivery payment solution beginning of 2015.
Klarna: separating buying from paying
At the core of Klarna’s services is the concept of after delivery payment, which lets buyers receive ordered goods before any payment is due (separate buying from paying). At the same time, Klarna assumes the credit and fraud risk for e-stores so that sellers can rest assured that they will always receive their money.
A consumer making an online purchase enters only top-of- mind information like an email address and zip code to buy an item. From there, Klarna assumes all the risk from the purchase transaction, pays the retailer immediately, and collects the amount due from the consumer within 14 days.
Consumers can settle the transaction with any preferred payment method. The process is made possible by Klarna’s proprietary risk assessment protocol. By using advanced data analytics and modeling, Klarna gives approved consumers a seamless buying experience and uses incremental identification to deter potential fraudsters.
“Klarna’s ‘buy now, pay later’ approach means consumers check out quickly and don’t have to pay until they’ve got the goods in their hands”, said Brian Billingsley, Klarna CEO of North America. “For retailers, this means more successful sales and a guarantee that they will get paid immediately, whether or not the consumer reimburses Klarna.”
Klarna: "Increase conversion, assume all risk"
“U.S. online retailers have grown disillusioned with existing payment solutions as the poor user experience has led to abandoned checkouts and lost sales for years. It’s common that 90 percent or more of consumers entering a mobile checkout do not complete their purchases”, said Brian Billingsley, CEO North America of Klarna.
“Klarna has a very simple value proposition: We increase conversion at checkout and assume all the risk. Klarna doesn't win if the retailer doesn't win. We founded Klarna with the vision to simplify buying online. By putting the consumer experience first, we can make the mobile a platform for shopping, and not just browsing”, said Sebastian Siemiatkowski, CEO and co-founder of Klarna.
“Across Europe, retailers who use Klarna have seen increased mobile conversion from a few percentages to close to fifty percent on average. That translates directly into more sales for retailers. Now Klarna is extending that opportunity to the United States.”
"Klarna Checkout" - simplifying buying - especially on mobile devices
The Klarna Checkout solution works across all platforms but increases conversion particularly on mobile. The average checkout conversion on mobile is between one and ten per cent, depending on industry and type of goods. For Klarna Checkout the equivalent conversion is about fifty percent.
“The success Klarna has seen in Europe gives me confidence as we enter the U.S. market”, said Billingsley. “I believe our commitment to delivering a streamlined and simple way to buy will become the standard for the industry to follow.”
Proven Track Record
￼Klarna has a proven track record in Europe to fuel its success in the United States, including more than 25 million users and 45,000 retailers including ASOS, Spotify and Zara. The company expects revenues of more than $300 million (approximately €250 million) in 2014 and is used for more than 200,000 transactions per day. It is forecasted to help retailers sell more than $9 billion (more than €7 billion) worth of goods this year.
Klarna was founded in Stockholm in 2005. Klarna Group has more than 1,100 employees and is active on 15 markets. They serve 25 million consumers and work with 45,000 retailers. Our investors include Sequoia Capital, General Atlantic, DST and Atomico. They have the ambition to become the world’s favourite way to buy. Click here for Klarna's Profile on About-Payments (and to see which payment providers support Klarna) and here to visit their website.
Article sourced from Klarna Press Release, September 19th, 2014