Klarna Announces Strategic Partnership with Stripe
In recent months, news related to “buy now, pay later” (BNPL) platforms has been coming fast and furious. Now, one popular service is expanding its reach thanks to a massive FinTech firm. Today, Klarna announced a strategic partnership with the payment platform Stripe.
As a result of the partnership, retailers that employ Stripe can now add Klarna as one of the preferred payment methods without any additional application or onboarding process. Currently, this functionality is available to Stripe customers in the United States as well as in Austria, Belgium, Denmark, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Netherlands, Norway, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom. On the other end of the partnership, Klarna reports seeing improved performance rates while using Stripe’s payment processing. In fact, 90% of Klarna’s payments volume in the U.S. and Canada is now through Stripe.
With Klarna, shoppers are able to purchase items and finance them using a four-payment plan. The first of these payments is due upfront with subsequent payments due in two-week increments. According to Klarna’s data, Stripe retailers that offered Klarna as a payment method saw a 27% increase in sales. Looking at Klarna retailers in general, the company reports a 41% increase in order volume as well as a 36% bump in purchase frequency.
Commenting on the growing partnership, Klarna CTO Koen Köppen stated, “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 maximize their entrepreneurial success through our joint services.” Köppen continued, “By offering convenience, flexibility, and control to even more shoppers, we create a win-win situation for both retailers and consumers alike.”
Stripe Chief Product Officer Will Gaybrick added, “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.”
The partnership between Klarna and Stripe arrives as BNPL popularity has exploded. In August, FinTech giant Square announced plans to acquire Afterpay for approximately $29 billion and integrate BNPL services into its existing offerings such as the Cash App and Seller platform. Meanwhile, Mastercard is introducing its own Mastercard Installments option that will allow retailers to offer financing to customers.
Given the ubiquity of Stripe and the growing popularity of Klarna along with other BNPL brands, this partnership could certainly have a big impact. Additionally, as competition in the space heats up, it will be interesting to see how this impacts the apparent BNPL arms race currently underway. In any case, expect to see plenty more Klarna payment buttons popping up on retail sites soon.