What is Klarna?

Klarna is a banking and financial service provider based in Sweden. It was established in 2005 and currently offers its services in the UK, US, Australia, and many other countries.

It offers point-of-sale financing services to consumers to purchase products online. For customers, it works the same as a credit card except you can avail Klarna credit even if you are not qualified for a credit card.

Consumers have three payment options in the online stores that offer Klarna financing services.

  • Pay in 30 days: This “try before you buy” method gives a buffer period of 30 days to the customers to pay the amount. Customers can also return the product within 30 days if they don’t like the product.
  • Financing: Klarna offers loans to buy products from online stores and pay it back on a monthly installment basis over 3 to 36 months.
  • Installment: Interest-free financing with four installment payments. The first covers 25% of the total amount and is charged to the credit card or debit card. The remaining three installments are charged automatically every two weeks.

Klarna gives credit to consumers and pays the entire amount upfront to the online store. So, it’s a win-win for both the buyers and the sellers.

How does Klarna help you to sell more to millennials

Due to various reasons, the number of millennials using credit cards is less compared to baby boomers or generation X. So, most of them can’t make use of the credit system to buy the products by deferring the payment.

But Klarna makes it possible. It allows customers with no credit cards to purchase products on a credit basis. It offers a huge opportunity for online sellers who want to sell more to the millennials. So, by signing up for the Klarna Retail Partner program, you can offer easy financing services to those who don’t have a credit card and increase the sales drastically.

Klarna gives the benefits of a credit card

People with credit cards can buy products on credit. But if you don’t have a credit card, it is not that easy to buy a product and defer the payment.

Klarna solves this problem. It allows customers to purchase products on credit even if they don’t have a credit card.

Moreover, it’s easier for customers to qualify for Klarna compared to credit cards. So, if you are a Klarna Retail Partner, you can attract customers who don’t have the money to buy the product by allowing them to pay the amount later. This way, you can improve your sales.

No interest and no fee

Klarna doesn’t charge interest or fee if the amount is paid within 30 days. This takes away the worry of the additional amounts for buying things on credit.

Klarna doesn’t charge interest or fee if the amount is paid within 30 days. This takes away the worry of the additional amounts for buying things on credit.

Offer try before buy option

Klarna allows buyers to return the product within 30 days if they don’t like it. This gives more confidence to the buyers because they are sure that they won’t lose the money if they don’t like the product. This gives more confidence to the buyers to make the purchase which naturally increases the sales.

Offer buyer protection

Klarna offers a buyer protection policy. It gives more confidence to the buyers because they don’t have to worry about losing the money if the products are defective or arrive damaged. It increases the confidence of the buyers which leads to the overall increases in sales.

Summary

Klarna is a great platform for both consumers and online stores. While allowing customers who don’t qualify for credit cards to buy products on credit, Klarna also increases the confidence in buyers with features like buyer protection, try before buy, and zero-interest. It will allow consumers, especially the millennial generation which has the lowest rate of credit card usage compared to boomers and generation X, to buy products on credit even if they don’t have a credit card. It makes Klarna a very effective tool to sell more to the millennials.