Hey there ASOS fans… we bet you’ve heard of Klarna, and even if you’re not an ASOS fan, chances are you’ve still stumbled across Klarna during your online shopping from time to time, maybe you’ve even used it and if our suspicions are correct, we think you could be about to start using it even more…
If you’ve not yet had the pleasure of a meeting with Klarna, then please allow us to do the introductions now…
Just “Klarna it”!
Klarna or Klarna Bank as it’s officially named, is a Swedish firm established in 2005 that’s best known for a new form of digital payment that allows shoppers to “pay later with Klarna”. Specifically you can pay between 14 and 30 days later (dependant on the retailer) for your online order. There are no interest fees, no late charges and it’s only a soft credit check required to be approved for the pay later service.
Other retailers also offer another Klarna product called “slice it” and this allows shoppers to spread the cost of their purchases by paying from them in monthly instalments over a period of time from as little as 3 months, to as long as 36 months. And as if all that wasn’t enough their third deferred payment option is called “pay in 3” and as the name suggests, this allows shoppers to simply repay the purchase amount in three equal instalments.
It's not just about payment plans though, Klarna has some other great advantages too, for one thing, customers no longer need to wait for money to be credited back in their account after making a return. It also gives shoppers greater flexibility when it comes to managing cash flow and Klarna’s regular payment reminders mean customers don’t even really need to think about making their payments because Klarna does it for them. In a word, it’s effortless.
Big brands, big benefits and big numbers
It’s this
effortless nature of Klarna that has seen it rise in popularity among consumers in recent years, so much so, that in 2019 alone, Klarna reported that in the UK over 55,000 new consumers we’re choosing Klarna every single week and globally they gained a whopping 16 million new consumers. As you can imagine, being this popular with consumers has made Klarna equally popular with merchants too.
In fact 190,000 of them were using Klarna in 2019 and these are big name businesses too, we’re talking the likes of River Island, Boohoo, and ASOS of course, Michael Kors, H&M, Samsung and thousands more. So if you’re in the retail business, if you have an ecommerce website, we’d strongly advise you to consider integrating with Klarna. If you’re not already convinced this is a good idea, here are even more reasons why it could be the right move for you…
First and foremost, you get upfront payments because while your customers can pay later, Klarna pays you immediately. That makes it ideal for maintaining your own cash flow and building revenues. Not only that, but you don’t need to sweat about collecting the funds from the customer either, as Klarna takes all the responsibility here too.
In short, you can sit back, relax and watch the money coming in and your customer retention going up. And just another note on customer retention by the way, Klarna’s own survey conducted in 2018 found that 94% of customers will return to buy from a seller that allows them to pay later for the purchases. 94%!
As more and more customers are using Klarna, you can guarantee soon that many will come to expect it as a payment option on ecommerce websites, big or small and that’s important because a ClickandBuy study found that 50% of users tend to cancel a purchase if the seller doesn’t support a payment method they like.
All in all, not investing in Klarna now, could see you lose customers further down the line. If you do invest, you can join the wealth of merchants enjoying the benefits of greater customer retention, higher overall revenue and higher average order values.
So which will it be? To Klarna or not to Klarna…