During the spring of 2014 Digital River World Payments partnered with Klarna to enable consumers a convenient way to purchase products and services from merchants either directly or later by invoice.
Consumers’ desire to buy now and pay later is fueling the growth of the popular payment method called Klarna. Paying later with an invoice has always been a strong consumer preference in many markets in Europe, and now players like Klarna are driving the transition for accepting invoices when buying online. Merchants who start using Klarna often experience a 20 percent increase in conversion rates, while some mobile users have seen an increase as high as 80 percent. Keep reading for more information about what Klarna offers merchants and why it is becoming an essential payment option in Europe.
Quick Facts you need to know about Klarna
- Klarna offers payment solutions to e-stores. The company was founded in 2005 with headquarters in Stockholm.
- Already serving more than 45,000 merchants across Europe, Klarna is also the name of a popular payment method that continues to grow rapidly both in popularity among consumers and merchants.
- The core functionality offered by Klarna is invoicing, where Klarna guarantees the payment to the merchant.
- As of today, Klarna manages over 200,000 payments daily, reaching across 427 million consumers.
- Two of Klarna’s products are Klarna Invoice and Klarna Checkout.
Digging Deeper: Klarna Options
Klarna Invoice is a traditional invoicing option. At the end of the checkout process, the consumer completes the purchase by entering only top-of-mind personal information, including name and address or an identification number – required personal information will vary by country. Klarna runs a credit check in real time and returns an authorization decision back to the merchant. A successful authorization means that the merchant is guaranteed payment, and the consumer will receive an invoice from Klarna 1-2 days after the goods were dispatched or instantly if it’s sent via email.
Klarna Checkout is a product that allows consumers to choose from various payment options at the end of the checkout process. Consumers cannot only pay later by invoice, but they can also select to pay directly with a credit card, online bank transfers or other popular payment methods.
Because the purchase, and the payment guarantee to the merchant is completed before the consumer is redirected to Klarna and bothered with selecting the different payment options, the merchant should expect to see significantly higher conversion rates, ranging from an average of 20 percent to seeing up to 80 percent conversion rate increases.
Installments – Both Klarna Invoice and Klarna Checkout offer consumers the ability to split up the payment over time with installments. The merchant is paid in full even if the consumer choses to split the payment up through installments.
Since Klarna has performed all the necessary credit and fraud checks beforehand, the risk of chargebacks due to consumer frauds is nearly non-existent. Klarna takes full ownership of that risk.
Klarna via Digital River World Payments
As of today, through the partnership with Klarna, Digital River World Payments supports Klarna Invoice in Norway, Sweden, Finland, Denmark, Germany, The Netherlands, and Austria.
By enabling Klarna through Digital River World Payments, merchants will not only be able to take advantage of a simple product integration, but they will also receive the same reporting and administrative tools that are part of the standard reporting structure used for other Digital River supported payment methods.
Have you enabled Klarna as a payment option on your online store? Share your comments about Klarna below.