By Stephanos Christodoulou
Your commercial awareness dose!
Klarna is a Swedish online payments company that was founded in 2005 to provide people with easy and reliable online shopping solutions. It is the biggest fintech company in Europe that helps millions of people purchase items conveniently. Klarna offers various options when it comes to online payments, allowing you to directly pay for your purchases or pay after delivery and through instalment plans.
The ease of payment and safe payment options make it very easy for the customers to shop using the Klarna payment method. Approximately 1 million transactions occur using the Klarna payment method every day!
The pandemic survival
The online payment platform gained popularity during the days of early COVID spread and lock-down when people had to stay at home and shopping centres were closed. The purchasing power of many people decreased as more and more people lost their jobs.
During the COVID hardships, Klarna helped the community which was on a tight budget make purchases. It let people buy things and pay later within 30 days. For larger purchases, Klarna allows the users to pay back the money in instalments that range from 3 months to 36 months. The best thing about Klarna is that it does not even charge interest for credit sales.
Merchants have also benefited from Klarna because the company pays the sellers right away and takes the complete responsibility of payment collection from customers. Online sellers that offer payment through Klarna see a higher customer activity because more people are willing to buy things when they can get them on credit, hence it improves retail sales.
Growth
The 15-year-old fintech giant is always getting bigger and better. In the future, there is a lot of room for scalability, keeping in view the company’s value currently at $5.5 billion and a work-force of 3500 employees. According to the company’s financial disclosures, sales grew 4 times during the second half of 2019 in the U.S alone. The company manages to raise funds for its growth based on its incredible performance and far- fetched international reception.
Businesses such as Sequoia Capital, Bestseller, Permira, Visa, and Atomico have invested in Klarna soon after the company started gaining momentum. During 2019, the company raised $460 million from investors such as San Francisco-based Dragoneer Investment Group and Commonwealth Bank of Australia. The company’s vision is to expand its operations in the U.S since 2015 when Klarna was first launched in the U.S.
Over the years, Klarna acquired major business firms that assisted the company in organizing and spreading its business functions such as the online direct payment company SOFORT in 2014, and an online marketplace, Nuji in 2020.
“Buy now, pay later”
The largest private fintech company in Europe has a 90% customer satisfaction rate. It is no wonder why Klarna has become one of the most successful fintech company because of the unique idea of “buy now, pay later” allures almost everyone, but it has many other benefits that are worth deliberating. Klarna’s checkout and payment process are eight times faster than other online payment platforms. The company achieves high customer satisfaction through an easy-to-use interface and excellent after-purchase experience.
Operations
Klarna also offers its services for in-store purchases at more than 10,000 stores across 17 countries, such as H&M, Samsung, and Schuh. The company’s 2019 survey reveals that a new merchant joined the company every 8 minutes. Around 115,000 customers from the U.S and 55,000 customers from the U.K joined Klarna every week during the same year. Klarna is expected to grow and expand further in the future with over 90% satisfied customers out of which 85% believe that Klarna is better than any other online payment methods.
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