Stockholm-based fintech giant Klarna, a retail bank, payments, and shopping service provider, announced that it has strategically partnered up with San Francisco-based online payments processing giant Stripe.
Speaking on the development, Will Gaybrick, Chief Product Officer at Stripe, says “We’re thrilled to partner with Klarna, so millions of businesses on Stripe globally can offer increased payment flexibility. Klarna’s payment options are a powerful tool for online businesses to attract more customers, boost conversion rates, increase basket sizes, and thus grow their revenue.”
Retailers using Stripe can now activate Klarna as the preferred payment method in their checkout.
The news comes after Klarna’s recent strategic partnership with Israel-based SaaS platform Wix. Together, Wix and Klarna will bring flexible, convenient payment options to Wix’s e-commerce merchants across 17 countries who can now accept payments from their customers with Klarna.
Payments infrastructure for the internet
Founded in 2010 by siblings John Collison and Patrick Collison, Stripe is a technology company that builds economic infrastructure for the internet. The company works with financial institutions, regulators, payment networks, banks, and consumer wallets so businesses that run on Stripe don’t have to.
Businesses such as Salesforce and Facebook currently use Stripe’s software to accept online payments and run complex global operations. Currently, the company operates in 42 countries out of which 31 are in Europe.
Europe’s hyper-growth companies such as Deliveroo (UK), Doctolib (France), Glofox (Ireland), Klarna (Sweden), ManoMano (France), N26 (Germany), UiPath (Romania), and Vinted (Lithuania) are some of Stripe’s clients. The platform counts more than 50 category leaders as customers – each of the companies processing more than $1B annually.
Besides, the company also claims to have built a programmable infrastructure for global money movement, known as its Global Payments and Treasury Network and has added products and services including billing, capital, connect, issuing, radar, terminal, and treasury.
Aim of this partnership?
According to a statement, retailers currently using Stripe witnessed that the integration via Klarna has led to an average of 27 per cent increase in sales. Also, on average, they have seen a 41 per cent upsurge in average order volume as well as a 36 per cent increase in purchase frequency.
Besides, some retailers experienced that 40 per cent of Klarna shoppers are new to their brand. This means, Klarna, which has more than 18 million monthly users, is also acting as a lead generator for such brands.
Koen Köppen, CTO of Klarna says, “Over the past years, Klarna and Stripe redefined the e-commerce experience for millions of consumers and global retailers. Together with Stripe, we will be a true growth partner for our retailers of all sizes, allowing them to maximise their entrepreneurial success through our joint services. By offering convenience, flexibility, and control to even more shoppers, we create a win-win situation for both retailers and consumers alike.”
Another good news for Stripe is that Klarna has further plans to strengthen this partnership. This is because according to tests with Stripe’s services, Klarna claims to have significantly improved their performance rates. For that reason, Klarna has shifted more payment processing volume to Stripe than initially planned, and currently partners for about 90 per cent of its payments volume in the US and Canada.
The two companies are planning to deepen and expand their partnership to more countries and products in the future.
Currently, Klarna on Stripe is available to all retailers based in Austria, Belgium, Denmark, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Netherlands, Norway, Slovakia, Slovenia, Spain, Sweden, the UK and the US.
Klarna: What you need to know
The company was founded in 2005 by Niklas Adalberth, Sebastian Siemiatkowski, and Victor Jacobsson. It is an e-commerce payment solutions platform for merchants and shoppers. The platform gives customers the freedom to choose how and when to pay.
Currently, Klarna has over 250,000 global retail partners, including H&M, Saks, Sephora, Macys, IKEA, Expedia Group, Samsung, ASOS, Peloton, Ralph Lauren, Abercrombie & Fitch, Nike, and Shein. It operates in 17 countries and has over 4,000 employees.
The company is one of the high valued private fintechs globally with a valuation of $45.6B (approx €39.1B). To date, the company has secured $3.7B (approx €3.1B) in funding and is backed by investors such as Sequoia Capital, Silver Lake, Bestseller Group, Dragoneer, Permira, Visa, Ant Group, and Atomico among others.
According to the company’s website, Klarna has a total of 90 million active consumers who transact around $2 million per day.