Alternative Payment Solution: Klarna
Klarna is a Swedish online payment service provider (PSP). Established in 2005, the company now serves 60 million customers and is accepted by over 100,000 online merchants across 13 European markets and the US. Klarna acquired SOFORT in 2014, turning it into one of the largest PSPs in European e-commerce. Now, Klarna accounts for 10% of total e-commerce payments in Northern Europe.
Klarna offers both immediate and pay-later options for e-commerce purchases, allowing customers to make payments within 14 days of receiving the items purchased. It also offers an extended credit financing option called Divide or Slice it, through which users can make payments in monthly instalments of up to 36 months. Klarna acts as a mediator between merchants and buyers and assumes the fraud and credit risk involved in transactions. To further enhance its product portfolio, in October 2018 Klarna launched its ‘Slice it in 4’ payment option enabling customers to pay in four equal instalments using a debit or credit card.
In November 2017 Klarna partnered with Nordic-based PSP Nets, to provide its customers with a pay-later solution at physical stores throughout the Nordic region. The company entered the P2P payment space in August 2017 with the launch of Wavy, an app that allows users in 31 European countries to send and request money by connecting their bank accounts or credit cards.
In June 2017 Klarna received a full banking license from Sweden’s financial supervisory authority, allowing it to offer banking products and services. In line with the banking license, in July 2018 Klarna announced the launch of the Klarna Visa debit card for in-store and online payments.
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