Dec 7, 20185 min read

It’s Time to Leave Our Wallets Behind.

Fredrik Thambert headshot

by Fredrik Thambert

Digital in-store payments have been on the agenda for many years. But now the concept is starting to take off on a bigger scale.


A couple of years ago, new mobile payment solutions for brick-and-mortar stores started to pop up in many countries. The technology, however, wasn’t quite there yet. Neither was the consumer behaviour; cash and credit cards were still very much king and queen of the retail world. But that is now starting to change at an accelerating pace. Our mobile phones have become smarter, and we’re starting to use them in a growing number of areas of our lives. Including payments.

This development is also fueled by innovations that make it easier for us to complete transactions without having to remove our wallets from our pockets. One of those is the new in-store checkout service developed by Klarna and the e-commerce solutions provider Viskan. The solution is the first of its kind, and the Swedish fashion retailer Lager 157 have just become the first merchant to implement it. They’re now piloting the self-service checkout in their newly opened store at Drottninggatan in central Stockholm.
“The credit card era is over,” proclaims Stefan Palm, CEO and founder of Lager 157. “Now, customers can pay with their mobile phones in a much quicker and easier process. As a merchant, we’re happy to offer new alternatives to cash and card payments.”

Lager 157’s business idea is to sell basic but fashionable garments, both online and offline, with prices that are lower than their competitors’. This is made possible due to their business model which involves a smaller collection of products, less marketing and cheaper store locations. A lot of their focus is directed toward understanding and catering for their customers’ needs.

“We don’t claim to be in the forefront of new technology. But we’re working hard on improving our service to consumers. This new checkout solution is a perfect example of that effort, and there is more to come,” Stefan Palm says.

The new checkout allows customers to pay for their garments without having to stand in line at a traditional register. They don’t even need to bring their wallet. The purchase is done through a terminal and their mobile phone. Everything gets registered in Klarna’s app, where users can manage their purchase and choose how they would like to pay. An advantage compared to paying with a card is that they can opt for Pay later or Slice it, which means increased flexibility and buying power.

“We have developed a solution that combines the flexibility of e-commerce with the benefits of shopping in the physical world,” says Linus Sandberg, Key Account Manager at Klarna.

This is how Klarna’s in-store works:

At Lager 157, Stefan Palm is happy to be able to provide this new service to their customers.
“A lot of people are talking about modern payment solutions, but the Nordics are still kind of old-fashioned when it comes to checkouts. We have worked hard to find better alternatives, and now we have come up with this together with Klarna.”

What are the advantages for you?
“Card transactions are expensive and inefficient for us. They also require a lot of staff at the registers. With this self-service checkout, customers can complete the purchase themselves with the help of maybe one person. That means we can have more employees in the actual store, providing better service and customer care.”

What is the future of payments in your view?
“I think we’re getting closer to a future model that is much more convenient for both merchants and consumers. For example, personal identification is one area that can be improved a lot with eye-scanning and other technologies, making the whole process both safer and simpler. But I think mobile phones will be the hub for all our payments and financial management for a long time to come.”

For merchants, there are more benefits to gain from enhancing their brick-and-mortar stores with mobile payment solutions that are connected to their webshop. An obvious one being better customer data, and the possibility to target people with promotions based on their previous preferences and geographic location.
“Individually tailored marketing will be hugely important success factor in the future. Consumers will have a much bigger influence on what kinds of deals they’re presented with. They’ll demand much more in-depth information about your products, as well as other people’s ratings and comments. Marketers must find smarter ways to present products, while also being able to understand and use customer data in a relevant way,” Stefan Palm says.

In his vision, there will be less room for merchants who don’t provide the best goods and services to their customers.
“The future of retail is all about ‘less bullshit’. Crappy products and irrelevant marketing will disappear. The ones who are good at what they’re doing will get a bigger slice of the pie, while opportunists will have a much harder time. The power will be in the hands of the consumers,” he believes.


Read more about Klarna In-store here.