Klarna has shored up its expansion plans with a string of new hires as it plans to introduce its payment solution to the US market.
The Swedish e-commerce company intends to tackle the US market in 2015, delivering a simple payments solution to merchants and consumers alike. Klarna claims that their model ‘separates buying from paying’. A consumer making an online purchase at Klarna Checkout enters only top-of-mind information like an email address and postcode to buy an item. From there pays the retailer immediately, and collects the amount due from the consumer within 14 days. Klarna carries out its own risk assessment of potential buyers.
While the service works over all platforms, Klarna has had the most conversion success with consumers shopping on their mobile. While half of online shopping now takes place on mobile, only ten per cent of browsers actually complete a transaction. Klarna’s ‘buy now pay later’ model brings the conversion rate up to around fifty per cent.
“U.S. online retailers have grown disillusioned with existing payment solutions as the poor user experience has led to abandoned checkouts and lost sales for years. It’s common that 90 percent or more of consumers entering a mobile checkout do not complete their purchases,” said Brian Billingsley, CEO North America of Klarna. “Klarna has a very simple value proposition: We increase conversion at checkout and assume all the risk. Klarna doesn’t win if the retailer doesn’t win.”
To drive U.S. expansion, Klarna has recruited Brian Billingsley from Alliance Data as Chief Executive Officer of North America; former Bill Me Later and PayPal director Carol Hargrave as Chief Marketing Officer; and former Apple payments counsel, Jin Han, as Chief Legal Counsel for North America. Earlier U.S. recruitments include Chief Credit Officer Matthew Risley from Treliant Risk Advisors and Chief Financial Officer John Keatley from Green Dot Corporation.
Klarna has more than 25 million users and 45,000 retailers including ASOS, Spotify and Zara. The company expects revenues of more than $300 million(approximately €250 million) in 2014 and is used for more than 200,000 transactions per day. It is forecasted to help retailers sell more than $9 billion(more than €7 billion) worth of goods this year.
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