Klarna plans $100m investment in US expansion

US-dollars

Swedish payments company Klarna is planning to invest $100 million in its US expansion, establishing its American operations in Columbus, Ohio.

The firm has been discussing its US expansion for a few months, and has finally come out with how much it is willing to invest in the move.

“We want to set a new standard for how people shop with their mobile devices. Columbus is at the heart of U.S. e-commerce activity and is the perfect launch pad for our expansion,” said Brian Billingsley, chief executive officer of Klarna North America.

Klarna’s Checkout will be competing with Stripe, which was valued this week at $3.5 billion, and PayPal, to help online merchants take payments.

Klarna’s service makes a risk assessment of customers based on their credit score and behaviour, allowing them to enter less information – just an email address and zip code – to complete a transaction the more reliable they are. Klarna then takes full responsibility for the payment, pays the retailer immediately, and collects the amount due from the consumer within 14 days.

At a point where merchants are battling online and mobile shopping basket abandonment and fraud, Klarna’s service could definitely appeal to the US market. Retailers who offer Klarna in Europe have reported a 30 percent lift in conversions for desktop shoppers and 70 to 80 percent for mobile users.

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