Sebastian Siemiatkowski, Niklas Adalberth and Victor Jacobsson jointly founded the payment service Klarna. Today, Siemiatkowski is CEO of the company, which has become one of the largest in the industry.
Around 2.5 million transactions are carried out daily by customers via Klarna and in 2023 the CEO had an annual salary of a whopping SEK 13,200,000 – in other words, Klarna became a success story.
Part of the success can be explained by something that has almost become the company’s slogan, namely the words “buy now, pay later”. In connection with Klarna’s invoices, the threshold for customers to shop was lowered.
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Now Klarna is turning the corner, and wants to get away from “buy now, pay later”. It highlights David Fock who is global product manager at Klarna, in an interview with Svenska Dagbladet.
– We are trying to go from credit to debit, or pay now. It is one of the big things we really want to get at, he tells the newspaper.
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Klarna’s office on Sveavägen in Stockholm. Photo: Claudio Bresciani/TT.
The reason is that Klarna wants to get rid of some of its credit losses, says Fock.
Today, many of Klarna’s customers prefer the option of buying first and paying later over the option of paying all at once. Only 30 percent of all payments with Klarna are direct payments.
– We generally believe that the best way to use Klarna is to use pay directly for the majority of your transactions, says Fock.
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He wants direct payments to make up 50 percent of all customers’ purchases with Klarna. Despite this, Klarna will not change the settings for the customer, but leave both options available as before.
– It comes naturally from giving consumers freedom of choice and flexibility. We will not push anything in particular on consumers, but they will be able to choose based on their preferences, he says the newspaper.
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Klarna is now investing in cashback instead, a function that allows the customer to get a couple of percent back on purchases in selected stores. These percentages can then be used in other stores that have a partnership with Klarna.
Fock believes that cashback will appeal to a wider group than “buy now, pay later” has. Which of the functions will be most popular with customers remains to be seen.