After Overstock, Klarna Looks To Add 50 to 60 U.S. Merchants By Year’s End

By Kevin Woodward

Klarna, a Sweden-based payments company that enables consumers to take 14 days to pay for online purchases, says its deal announced Tuesday with Overstock.com is the first of many it expects to make with e-commerce retailers this year.

Retailer Overstock.com sells a broad range of merchandise, and the addition of Klarna, which also enables an expedited checkout process, removes some of the friction from the purchasing experience, Overstock.com says.

Beyond Overstock, Klarna says it expects to sign up between 50 and 60 U.S. merchants by Dec. 31, and “we would be disappointed if there weren’t hundreds of merchants selling with Klarna in the U.S. by the end of 2016,” Brian Billingsley, chief executive of Klarna North America, tells Digital Transactions News via email.

Klarna gives consumers 14 days to pay for purchases. Merchants receive the funds immediately from Klarna, however.

To pay using Klarna at participating merchant Web sites, consumers select the checkout button. If they want to use Klarna, they input their email address and ZIP code on the site.

That information is passed through Klarna’s database, where it is checked for any prior Klarna transactions. If it’s a new customer, additional identity-related questions may be asked. Additional questions might also be asked of existing Klarna users if the purchase appears out of the normal, such as a much higher price or frequency, Billingsley says.

The consumer can use most popular payment options, like credit and debit cards, to pay Klarna within the 14-day window.

Klarna offers benefits for merchants and consumers. For consumers, the benefit is they can pay after delivery, ensuring the product is what they ordered. “This helps convert customers who are not comfortable buying online or who do not wish to pay before they have received the goods,” Billingsley says.

For merchants, the benefit not only is potentially gaining reluctant online shoppers, but also making it easier for those shopping on mobile devices, he says. Overstock.com, for example, is using Klarna for mobile Web guest transactions.

A new mobile Web guest user enters an email address and delivery address onto the checkout screen, and may not need to enter a credit card number or additional information, Klarna says. If the transaction is approved, the consumer has two weeks to pay. Klarna accepts Visa Inc., MasterCard Inc., American Express Co., and Discover Financial Services payment cards.