Klarna, best known for its “buy now, pay later” technology, is preparing to launch a payment card as it prepares to break out beyond its stronghold markets of Scandinavia and Germany.
The Swedish technology business – which has partnered with ASOS in the UK to offer a service that allows customers to order items for free, try them at home, and only pay for what they keep up to 30 days later – is testing its payment card with 1,000 consumers at the moment, according to the Financial Times.
Instead of a normal card statement that shows the amount spent and the name of the supplier, Klarna’s card statement will show customers exactly which item they have bought, track its delivery, organise a return or speak to customer service via an app.
Klarna co-founder and CEO Sebastian Siematkowski told the FT that the business, which got its banking license last year, had a opportunity to shake up the banking system and shift the focus more to the needs of the consumer.
“We are on a long-term mission here. There is now a massive opportunity to change an industry where, unfortunately, banks have been more absorbed with themselves that their customers. We can bring that focus on customers – we want to be a digital assistant but focused on financial items, managing your economy,” he said.
Klarna was founded 13 years ago in Stockholm and last year posted revenues of around $515m in 2017 and was valued at $2.5bn. It is most active in Nordic countries and in Germany but is starting to become known in the UK following the tie-up with online fashion giant ASOS, which was announced last November.
Last month it was revealed that Swedish fast fashion site NA-KD would also be offering flexible payment services to UK, such as buy now, pay later, in partnership with Klarna.
Growth in the US, a key target market, has been relatively slow thus far for the business but Siematkowski said that was in part down to the success Klarna had achieved in the Nordics and Germany and its focus there. Industry watchers also point out that the US customer is not used to paying by what is effectively an invoice, although global online behemoth, Amazon, is trialling its own try before you buy service in the US, Prime Wardrobe, which should help to acclimatise the customer to this new way of shopping.