Klarna and Arcadia let online shoppers buy now, pay later

Swedish online payments giant Klarna has teamed up with retail group Arcadia to launch a 'buy now, pay later' service for online shoppers in the UK.

Under the deal, Arcadia's brands - such as Topshop and Miss Selfridge - will take advantage of Klarna's new e-commerce retail financing option to let customers buy product online and then pay for them over time.

Klarna says that its service does away with the lengthy forms associated with traditional credit application processes. The company separates buying from the paying and pre-authorises customers in real time when the order is placed. Customers deemed eligible for credit are then able to spread payments for a period of up to 90 days, interest free.

Citing its own research, Klarna claims that two thirds of Brits have abandoned online shopping baskets and that by improving the customer experience and offering more flexible payment options it will help Arcadia boost sales, as well as loyalty.

Luke Griffiths, UK GM, Klarna, says: "More consumers are shopping on the go than ever before, but in our fast-paced lives shoppers get frustrated by long and complex checkouts and a lack of flexible payment options. To get ahead, retailers need to offer a simple, hassle free browsing and buying experience that integrates seamlessly into their customers’ lives."

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Does this strategy helps to curtail Mammoth Shopping Cart Abandon rate and value that most of the online retailers face or some thing more in it for retailers?

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A Finextra member 18 September, 2016, 12:49

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According to Klarna chief operating officer Sebastian Siemiatkowski, that’s as a result of the company’s service is quite simply some way of providing patrons with instant credit. It’s checkout service handles all varieties of payment ways, as well as credit cards (after writing in your email address, you'll enter your mastercard and it'll be saved for future use). the larger purpose, Siemiatkowski told U.S.A. this past fall, is that Klarna simplifies the checkout method, material possession you get stuff with fewer keystrokes. “There remains abundant|an excessive amount of} much friction with payments, too several steps, an excessive amount of stuff you have got to enter,” he said.

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Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 18 September, 2016, 19:31

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I got into a Q&A on some blog a few years ago with a Klarna cofounder / CEO. I remember him saying that Klarna charges merchants only 0.5% transaction fees, which is much lower than credit / debit card MSC and also that Klarna has been profitable from Day One!