Klarna in Society.
At Klarna, our mission is to accelerate commerce and make it easier and safer for people to shop and pay for their purchases. With our focus on customer obsession and commitment to transparency and accountability at the heart of everything we do, we are proud to be a trusted partner to 150 million consumers and 500,000 retailers across 45 markets.
Our amazing talented people and innovative technologies enable us to deliver this mission and we believe that we are making a positive impact on society and helping to drive the global economy forward.
1. Who is Klarna.
1.1 The payments network of the future.
Klarna is a global leading payments network and shopping destination that accelerates commerce by offering fairer, more sustainable, innovative solutions. We are committed to providing a seamless and secure shopping experience that help our customers:
1.2 We’re a fast-growing consumer ecosystem.
global active consumers
global retail partners across 15+ verticals
total volume 2022 with 22% year on year growth
employees with 100+ nationalities across 46 offices
consumer transactions every day
total app downloads and 26m monthly active users
gross margin in mature markets in 2022, with 14 out of 17 years being profitable
connected banks, across 27 countries through our open banking platform
Partnered with the biggest brands.
Trusted by the best consumers.
Supported by leading investors.
1.3 Everyone is using Klarna.
People across the world are using Klarna for their everyday spending — both online and in-store, across all types of verticals and industries.
There is no typical Klarna consumer.
of the total adult population in our most mature markets are Klarna users
is the average outstanding balance per consumer vs $6,000 for credit card users
of consumers pay off their balance with Klarna
1.4 Klarna customers are:
Balanced in gender representation.
In all stages of life.
Of all educational backgrounds.
Living in all areas.
1.5 Klarna is much more than just BNPL.
We are a regulated bank and have offered flexible payment options since 2017.
People choose Klarna for multiple reasons.
1.6 Our customers have one thing in common – a deep distrust of traditional banks.
When asked “is Klarna a better option than a credit card?“, here’s what Klarna consumers said:
Resulting in high customer engagement levels compared to the industry.
Believe Klarna is a better option than a credit card.
Are active after 12 months.
1.7 And it is not just Klarna customers who resent old banks.
Global trust level in the financial services industry — bottom of all in 2021
Of US consumers aged 18-34 would prefer fintechs over legacy banks
Of people don't entirely trust their banks to handle their data responsibly
1.8 This is driving Klarna’s fast growth compared to legacy financial firms.
Year-on-year growth full year 2020 to full year 2021.
2. We’re on a mission to accelerate commerce.
2.1 Banks’ original purpose was to promote trade.
By facilitating the exchange of goods, early banks played a pivotal role in helping markets become more efficient.
2.2 However, the industry has lost touch with its original purpose.
Evidence shows that banks have had the wrong priorities.
Often at the expense of customers’ well-being.
2.3 Contributing to the widening wealth gap in society.
Incumbent banks and credit cards have paved the way for the greatest redistribution of wealth, where low-income households and the unbanked pay more but don’t benefit.
35 people pay $21
Lowest income households paying more to subsidize costs and fund credit card rewards.
1 person receives $750
Credit card benefits paid out to high-net-worth household in cash back and reward points.
3. Making markets smooth.
Klarna is taking on the trillion-dollar retail banking industry to return to the original purpose that the traditional players have stepped away from - to promote and accelerate commerce while putting consumers at the heart of what we do. With our suite of innovative products and services, we solve real problems for consumers and retailers and continue to ensure markets remain efficient while our customers remain satisfied. Not too bad for an old invoice company from Sweden. We empower our customers through solutions that offer:
3.1 Flexibility and choice.
One-click payment, fast and secure.
Pay in 30.
Interest-free, try before you buy.
3 or 4 payments.
Interest-free, bi-weekly or monthly.
Interest free and interest bearing.
3.2 Credit at the lowest possible cost.
Predatory credit terms incentivized for profitability at the expense of consumers’ well-being.
29.9% point of sale APR
Average outstanding balance of $6,000
$5.50 — society pays to credit card providers for every $100 spent
We offer healthier payment options with full transparency and choice — no dirty tricks.
0% APR on BNPL products
Average outstanding balance of $100
Up to 60% lower costs society pays to Klarna for every $100 spent
3.3 Dynamic underwriting for sustainable lending.
One-off underwriting when consumers sign up, optimized by banks for their own profit.
Single underwriting decision doesn’t account for changing financial circumstances
Sky-high credit limits for new customers to drive unhealthy consumption
Automatic credit limit increases to promote usage
Encourages minimum repayments and allows cash withdrawals and balance transfers
Poor customer insights from legacy systems that rely on out-of-date data
Dynamic underwriting optimized for sustainable lending that puts the consumer first.
At every purchase: A new real-time underwriting decision for every transaction
Small limits on 1st buy: New consumers start with small credit limits
Gradual credit limit increases: subject to repayment history, with account frozen if payments are missed
Fixed dates/amounts: Credit for specific purchases with clear repayment terms, fixed and short-term. Consumers can’t borrow in cash
In real-time: Combines credit bureau and internal insights with open banking data to build a real-time view of a consumer’s financial position
Through our dynamic and more effective underwriting, we’re able to pass on savings to both retailers and consumers by providing credit at the lowest possible cost.
repayment rate globally
lower consumer and fraud losses than credit cards in mature markets
3.4 Simplifying consumers’ everyday lives.
A different app for each task.
With all tasks in one place, we’re reducing clutter for consumers.
3.5 A seamless user journey at no added costs to retailers.
A fragmented user journey when searching for card statements that charges retailers for customers they already have.
Retailers spend on average $0.2 per click on branded search ads
Statements with SKU-level data allow consumers to engage with their favorite brands again and again, at no added cost to the retailer.
Est $10m in annual savings in retailer ad spend
3.6 We’re the network of choice.
And we will continue to deliver better consumer and retail partner outcomes, to build preference and power our long-term growth.
more app downloads than our closest competitor
retention rate compared to industry standards
of consumers are active after 12 months, versus 55% of credit cards
growth in number of retail partners since 2018
of the US top 100 retailers choose us as their partner
leads sent to retailers in 2022
4. Expanding into commerce solutions.
4.1 We know what consumers value.
Irrelevant ads that make no sense
An experience/product that causes worry and stress
Impersonal treatment with no concern for your well being
Truly relevant and interesting ads
A tailored experience that suits you
The same familiarity of your favorite local restaurant or corner shop
4.2 A great matchmaker that builds long-lasting relationships.
We have a deep understanding of the digitally transforming market, its players and their needs, and can turn that into great offers and services with our state-of-the-art technology.
Masterful matchmaking for better retention
Building valuable, long-term relationships between consumers and retailers
Assisting brands and products to better understand their customers
Delivering superior pre- and post-purchase experiences across channels
Supporting local businesses to become global
Allowing consumers to own their data and maximize its value across the ecosystem
4.3 Which is why Klarna is much more than just BNPL payments.
Supported by strategic investments to broaden our offering.
PriceRunner is a price comparison platform for e-commerce, offering to help consumers find better products at better prices by comparing with many merchants.
Stocard is a mobile wallet designed to increase shopper loyalty through tailored offers.
Piggy powers Klarna’s desktop extension which provides Klarna payment methods at desktop checkout and automatically adds coupons and cash back.
Hero is a virtual shopping platform for eCommerce, offering live streaming solutions for online merchants and in-store personnel to assist and convert online shoppers.
APPRL allows content creators and retailers to work together frictionlessly to design immersive and informative shoppable content.
Inspirock is a travel planning website with a unique interface that enables travelers to plan their entire itinerary from transportation to activities.
5. We’re not the next Big Tech.
5.1 Big Tech has exploited its power similarly to banks.
They misuse consumer data, exploiting and locking them in.
79% of frequent internet users agree that companies don’t allow them to control their own information.
They extort fees from retailers who have no choice but to buy their service.
14% higher Google Shopping prices than other comparison services.
The result? Trust is undermined.
of US consumers don’t trust Big Tech. Source: PR Newswire
of small business owners say large corporations, such as Amazon and Google, have a negative impact on their growth opportunities. Source: Lendio
5.2 We know trust is built on honesty.
We are huge in Sweden where we are now part of people's everyday lives, but our journey there has taught us much.
Just another digital payments solution
We started off by following a simple recipe: Make online shopping easier and safer; Drive online sales; Replicate old banks’ lucrative business models.
Becoming the change we wanted to see
We realized the industry’s practices were not aligned with customers’ best interests, so: Our first approach was to be honest about it. Our second approach was to transform the industry.
Competition pushed us to be better, faster
The road was challenging and change was slow - there was nothing driving us forward! It wasn’t until some worthy opponents appeared that we were able to pick up the pace and transform our entire business.
We have learned from past mistakes and those learnings are now embedded in Klarna’s very DNA!
Customers always come first
If it’s good for your customer, it’s good for you.
If you’re big, you have to be nice
As you benefit from economies of scale and better margins, give that back to consumers with lower prices.
Promote and embrace competition
Both within and without, it will make you better, stronger, and more focused!
5.3 Finally, unlike ‘Big Tech’, we promote and reward data mobility.
Big techs gate-keep data under the pretense of protecting privacy. They then monetise this data, growing their profits at the expense of society.
We give consumers ways to securely share their data with partners, helping them understand what they are doing and that the whole ecosystem shares the rewards.
6. Driving better outcomes for consumers.
6.1 Access is key.
We firmly believe in consumer choice — the more options for consumers the better as studies suggest that limiting choice by restricting access can have dangerous implications and put consumers in harm’s way.
Well-functioning, competitive markets are the strongest force to grow societal value and bolster consumers’ access to healthier providers, by pushing industry players to improve their standards and the quality of their offering.
6.2 Regulation should set the guardrails.
Not all providers are created equal so we need regulation — specifically outcomes-based regulation, which drives innovation and empowers consumers to safely access new products and services while protecting them from harmful industry practices and bad actors.
But balance is crucial as too much regulation has often led to unintended consequences that ultimately end up harming consumers.
Klarna has an increasingly profound impact on the world, and we constantly reflect on our responsibility and purpose to society, with our mission to accelerate commerce as our Northstar. By challenging the industries we operate in, with a singular focus on serving our customer's best interests, we will continue to deliver real value to society. This is who we are. This is why we are.
All financials as of June 2022 unless otherwise stated.
Last updated: 23-01-2023.
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