Jun 7, 2022 10:16:00 PM | Insights Boost Your Business by Selling to Klarna's 90 Million Customers

Everything you need to know about Klarna, including what challenges it addresses, how the Pay in 4 solution works, and how to get started.

Table of Content

  1. Intro
  2. Company Portfolio
  3. Understand 3 Key Advantages of Klarna
  4. Payment Options Klarna Offer
  5. All You Need to Know About Pay in 4
  6. Klarna’s Rewards Club
  7. Klarna at Shoplazza

 

During the pandemic e-commerce boom, the "buy now, pay later" service became especially popular since it gave customers more purchasing power by providing quick and easy alternative payment methods. So, as an online entrepreneur, how do you embrace this trend to reach more clients and position your company for future growth?

Klarna, one of today's leading pay-later providers, is an obvious choice for businesses looking to engage with younger customers, such as Millennials and Gen Z. Klarna offers clients more flexible, transparent spending alternatives and a straightforward checkout process. The Pay in 4 solution, in particular, allows customers to divide their purchases into four interest-free installments. In this post, we'll go over everything you need to know about Klarna, including what challenges it addresses, how the Pay in 4 solution works, and how to get started.

Company portfolio

Klarna is a Swedish payment service company that provides consumers and merchants with easy and seamless financing solutions. Klarna's mission is to free people from the complexities of payment plans and interest rates, allowing them to focus on the things that truly matter in life. Klarna is currently accessible in over 70 countries. As a prominent global payments firm, Klarna has 147 million users worldwide and is partnering with 400 thousand retailers worldwide.

Klarna allows the customer to shop now and pay later. It is a safe, secure, and convenient way to pay for their purchases. Klarna takes on the risk for shoppers buying online by offering them the option to pay for their purchase over time and receive immediate delivery. It is available for online and in-store purchases, as well as online and in-app transactions.

Understand three critical advantages of Klarna

Klarna is more than just a modern payment method. It enhances the complete shopping journey from pre-purchase inspiration to post-purchase management. Klarna distinguishes itself by three essential benefits.

1. Easy purchase management

Klarna is a safe and secure payment option. Their services are built to create a smooth shopping experience from beginning to end. They increase shopper control, freedom, and loyalty. It gives shoppers a clear overview of their purchases and easy post-purchase order management. Customers’ credit or debit card information will be encrypted and not be shared with anyone, and they will only be charged for their purchase when it is shipped. Klarna has served over 90 million customers, and its app has over 14 million monthly users. Overall, Klarna’s shopping experience reduces friction and increases conversion among customers.

2. Promotional messaging

Shoppers learn of their flexible options when they enter a retail site. Merchants can implement Klarna’s On-site Messaging to inform shoppers about flexible payment options throughout the shopping journey. Different payment options are displayed based on the basket size of the order. On each product page, shoppers learn that they can buy now and spread the cost over four convenient payments at no additional charge. In addition, Klarna often collaborates with digital agencies to produce great results and optimize returns for brand partners. Merchants can also apply Klarna’s co-marketing support towards paid ads highlighting Klarna as a payment option for each new customer. According to a case study conducted by Klarna's partner OUAI, advertisements featuring Klarna performed much better, generating 30% more clicks than non-Klarna ads. 

3. Global solutions

Klarna follows big brands everywhere they go, ensuring that the payment solution is tailored to the local market and thrills customers as much as the products do. Klarna's products are designed to be flexible to local preferences and laws. They also offer a dedicated team of marketing, analytics, and technology specialists that will provide hands-on assistance to merchants as their businesses grow.

All you need to know about Pay in 4

What is Pay in 4

Pay in 4 solution enables customers to split their purchases into four interest-free payments over time. This allows customers to choose a payment plan that fits their budget, which has proved to be an effective strategy for increasing sales for brands. For customers, if they choose to pay for your purchase in monthly installments, they will be required to provide their credit or debit card information. Their card will be charged automatically on the due date of each installment. They can also choose to pay for the purchase in full. More details about this service are included in the table below.

How it works

Here is the process of how to Pay in 4 works.

1.At checkout: the customer selects Klarna as their payment method. They will see the option to pay in 4, along with the cost and payment schedule.

2. On shipment: once the order is processed, Klarna pays the retailer upfront and in full. They will take care of collecting the payments from the shopper.

3. Post-purchase: your shopper gets a clear overview of their purchases in the Klarna app and can easily manage their orders.

Why it can help increase sales

Pay in 4 is an important option to offer your customers. Based on statistics, the order value of brands that have incorporated Klarna's four interest-free payments would grow by 45 percent on average. If four interest-free installments were not offered, 44% of users would have abandoned their purchase. Klarna currently works with a slew of major businesses throughout the world.

Let's take a look at Sephora's case. Sephora has experienced a considerable increase in average order values compared to other payment methods since rolling out Klarna's payment solutions to clients across the US and Canada. In North America, basket sizes on its mobile shopping app have increased by 36%, while basket sizes on its web store have increased by 35%. “All clients tend to spend more time shopping, so it makes sense that they are also more likely to use four interest-free installments and hold onto their money for longer,” said Kendy Lau, Senior Manager at Sephora US.

Here are three reasons why Pay in 4 can help brands generate more revenues.

1. Boost customer purchasing power

The most apparent reason for its success is that it lowers the barrier to entry for customers by letting them spread the purchase cost over four interest-free installments, all while receiving the full amount up front from Klarna. Because when cash flow is limited and credit cards are maxed out, especially in those holiday months, it can be challenging for shoppers to make a purchase, even when they’ve found something they love. By boosting customer purchasing power, merchants can make their products more affordable.

2. Enjoy financial breathing room with no cost

Customers pay no interest or fees for the Pay in 4 while gaining financial breathing room to purchase what they want and control their budget. This is beneficial to customers because they need to pay off all the debt in full each month if they use regular credit cards to pay for their products. Otherwise, credit card companies would charge them interest. If they don't pay off the debt, it may quickly accumulate and get out of control. On the other hand, pay in 4 by Klarna lets clients pay later without incurring interest and has no impact on their credit score.

3. Receive marketing support for future growth

In addition, it’s not just about payments. Merchants who partner with Klarna have access to customer insights and marketing ideas. Merchants can make more data-driven decisions thanks to Klarna's data on who they deal with and what they've tested. Having a strategic partner with whom you share a shared aim might open many doors for your company to flourish.

Rewards Club

Everyone in the business world understands the value of customer retention since it is considerably less expensive to keep a client than to acquire a new one. By joining the Klarna rewards club, customers can earn points to unlock perks and get special access to exclusive club deals and experiences. Over 4 million people have already joined the rewards club. The following are some of the advantages of joining:

1. Perks from the get-go. Unlock a welcome reward for making your first payment as a member, no matter the value.

2. Exclusive access. Be the first in line for unique content and deals. These exclusives are for members only—so join the club.

3. $1 equals 1 point. Get 1 point for every $1 you spend and earn your way to great stuff from your favorite brands. Customers will be rewarded for every 500 points they earn. 4. Earn points with Missions. Complete tasks in the app to get even more points. Check out which Missions you can do today.

Klarna at Shoplazza

So far, we've seen how Klarna helps businesses attract new consumers and increase sales by providing buyers with various flexible options. Klarna is more than simply a payment gateway; it also offers services to help clients improve their whole shopping experience, from discovery to post-purchase.

At Shoplazza, we help businesses set up payment options in various ways to increase order conversion rates. With only a few clicks in Shoplazza, you can add Klarna as a payment option to your online business. Here's a step-by-step guide on getting everything set up.

Step 1: Navigate to Shoplazza Admin, go to Settings, and click Payment channels; then, you see Klarna.

Step 2: Enable Klarna for payment collection. Click Enable on the pop-up window. 

Step 3: Click Activate on the page, and fill in the detailed Klarna account information to link. 

Shoplazza, as a SaaS pioneer, is dedicated to helping our clients globalize and scale up their online presence with our technology and ecosystem advantages. In the battle to compete in eCommerce, merchants can take advantage of all the resources and tools at Shoplazza to reach out to more customers, generate more sales, and embrace future growth.

Sign up today to get a 15% discount! Turn dreams into actions at Shoplazza!

Written By: Min Chen

Read articles written by Min Chen and learn the essentials about developing eCommerce businesses on Shoplazza.