Klarna Bank AB (publ), one of the leading global payment providers, has released its annual financial statement for 2017 (link), and reveals that it was a record year for the company, with 42% year on year global growth in sales volume.
The growth was largely driven by increased adoption by retailers, with a host of new merchants signing up in 2017. As a result, 89,000 retailers globally now use Klarna products, this represents a 20% growth compared to the previous year. Available in 14 countries, retailers are increasingly adopting Klarna solutions which makes the payment processes as smooth as possible for consumers. As a result of the surge in retailer adoption, Klarna now handles 10% of all online payments in Northern Europe.
2017 also saw significant growth in the number of consumers actively using Klarna, with 19 million new users last year.
Michael Rouse, Chief Commercial Officer at Klarna, commented, “2017 was a fantastic year for us, with strong upsurge in retailers adopting Klarna solutions and including brands like ASOS and Topshop. Online merchants and high street retailers are telling us that they want to offer simple, smooth and flexible payment options which integrates seamlessly into their digital customer journey and offers a superior user experience at checkout.”
UK market supports growth
The significant global growth was also reflected in the UK market, where the number of merchants actively using Klarna more than doubled. New partnerships with online retailers such as ASOS and Arcadia Group contributed to a 145% YOY increase in merchants in 2017. Retailers using Klarna in the UK recorded a 20% increase in conversion rate at checkout.
Pay later, Klarna’s ‘try before you buy’ product, which allows consumers to defer payment for 14 - 30 days, was a significant driver of growth in the UK. Use of Pay later increased five-fold in 2017, with 1 in 3 fashion shoppers now opting for Pay later when it is available at checkout. There was also a 22% increase in the number of items in customer’s baskets amongst Pay later merchants. On average, Klarna's Pay later merchants in the UK recorded a 20% increase in annual purchase frequency as the flexible payment solution kept customers coming back. ASOS recently cited technology investment, such as Klarna’s ‘try before you buy’, as a main contributor to its strong Q4 performance.
Rouse concluded: “The UK market is evidence of Klarna’s strong momentum - buoyed by merchants who understand the importance of enhancing customer experience to boost conversions. As payments become a core USP for retailers, we aim to maintain this momentum and continue our expansion throughout 2018.”