We are very excited to announce our new integration with Klarna - a giant in the exponential ‘buy now, pay later’ trend. Our TRIMS clients can now boost their omnichannel strategy to offer Klarna in-store.
It is hard not to notice the recent explosion of ‘buy now, pay later’ options available at online checkouts. A prolific name in this growing trend is Klarna.
The Klarna name is not only seen at online checkouts but is a marketing tool in its own right. Splashed across the websites of thousands of retailers, the offering is definitely worth shouting about.
But why limit the way your customers can buy now and pay later to your online shop? Touchretail are now one of the first accredited epos providers to offer in-store integration with Klarna in the UK. This means your customers can purchase in-store, you still get paid instantly but the customer can choose to pay in instalments.
What is Klarna?
Klarna is now one of Europe’s largest banks, with 1 million customers (and counting) using it every day.
- Pay now: direct payments
- Pay later: after delivery or 30 days (only available online)
- Slice it: pay in 3 monthly instalments
- Slice it: pay over 6, 12, 24 months (for larger purchases such as furniture)
Klarna differentiates itself on the speed and ease of the purchase experience, letting customers pay when and how they want. What makes them different from traditional lenders is that most of its pay later options do not charge any interest or fees. What’s more, the customer doesn’t have to register or set up an account. Klarna simply uses their contact details to do a ‘soft’ credit check that takes an average of 1-2 minutes for approval.
The best part for retailers is that Klarna pays you instantly. There is no delay in receiving full payment whilst the customer has the flexibility of 'slicing' the payment. The till operator can see that the transaction is approved before releasing the purchased goods so there is no risk to the retailer.
Post-purchase, the customer is given full access and control with the Klarna app or website. They can make other purchases, extend the length of their agreement, see what they bought from where and view their payment schedules.
The Rise of ‘Buy Now, Pay Later’
Giving the customer control and convenience is a key part of a customer-centric approach. Offering payment options increases sales by reducing purchase anxiety and friction. The perceived investment of the purchase is reduced so customers are more likely to make larger purchases more frequently (read on for impressive statistics).
‘Buy now, pay later’ has traditionally meant committing to a credit card or having to set up an account. Klarna removes that friction by reducing the transaction time down from 10 minutes (for store credit or similar schemes) to less than 2 minutes. Existing Klarna customers can expect approval within 30 seconds. See the in-store Klarna customer journey.
This type of shopping is particularly common with young, female customers aged between 20-35 buying items in the fashion, beauty and lifestyle categories. It is growing so quickly in popularity that a new merchant joins Klarna every 8 minutes.
A recent #IWantKlarna campaign saw hundreds of tweets from customers asking their favourite retailers to adopt Klarna, with 31,000 votes from customers wanting the pay later option.
What Will Klarna Bring to Your Business?
- Increased number of orders and average spend
- Reduces the need for discounting to boost volume of sales
- Boosts spontaneous purchases
- Eliminates “where is my refund?” communications
- Gives the customer convenience without incurring risk
- Opens another payment channel
Klarna claims it can increase a retailer's order frequency and customers’ average spend. After its launch with Gymshark last year, the retailer's average order value increased by 33%. This is attributed to Klarna meeting customers’ rising expectations of transparency, ease of use and clarity.
It allows retailers to break what can become a discount cycle that devalues the brand. The purchase made is more affordable for the customer without the retailer relying on discounts to lift sales.
Klarna retailers can expect a rise in spontaneous purchases as refund anxiety is removed. For example, customers can return a pay later in-store purchase without the money ever leaving their bank. This peace of mind encourages purchases that are higher in value and more frequent than if there was no pay later option.
The number of items per basket is 22% higher for pay later orders with pay later customers having a 20% higher annual purchase frequency.
With the refund handled between Klarna and the customer, there is no “where is my refund” contact to the retailer from customers.
Klarna opens a new payment channel and currently has an average of 10-15% share of online checkouts in the UK. This shows an impressive consumer adoption of the new way to pay.
TRIMS Integration with Klarna
There are now 190,000 retailers already offering Klarna online, but you can be one step ahead by making Klarna available in-store too; complementing omnichannel strategies.
Existing TRIMS customers can have Klarna added as a tender option into their in-store tills through our new integration.
The integration is very quick to install and can generate substantial gains for our clients. There is no risk to the retailer as Klarna sends the money at the time of the transaction. The process is fast and simple; the till operator enters the customers email and Klarna does the rest in less than 2 minutes. I think this will be a fantastic addition to our clients’ in-store experience.
Integrations Manager at Touchretail
Interested? Get in touch to give your customers the payment flexibility they want. Complete our enquiry form .
What will the customer need to do at the till? Read our article on the super simple Klarna customer journey.