Klarna - the fintech innovators that set out to simplify payments by allowing consumers to receive purchases before paying for them whilst taking on the potential credit and fraud risks of the online retailer - have released their 2018 financial report and it contains a number of key insights relevant to the industry as a whole.

The past year’s success was defined by strong financial momentum gained in 2018 with a 36% increase in sales volumes to USD 29 billion and a 31% increase in total net operating revenues to USD 627 million. Another 25,000 merchants were added in 2018 alone, that have contributed to the platform now processing over a million transactions daily. Whilst Klarna added 26 million new customers in 2018, perhaps more impressive is their retention rates, with over 70% making multiple purchases. Their CEO and co-founder, Sebastian Siemiatkowski, attributes the success to:

“A relentless focus on the experience stretching beyond the actual transaction has differentiated us in the market, we know consumers and merchants will not settle for average and at Klarna neither do we.”

Building Journeys

Klarna’s services embody the values that the fintech movement have spurred, as they have concentrated on building a personalised user journey around a once banal engagement point (for merchants also). A merchant portal was added to provide merchants with additional insights on their current customer base so portals can be tailored, and their SME toolbox provides access to a range of ancillary services such as access to capital.

Their buy-now-pay-later mentality is indicative of a wider trend to leave the traditional debit/credit cards at home in favour of more convenient and cost effective alternative finance and payments options. They have issued over 100,000 Klarna cards, launched an app and a Klarna store. As we see expansion from the ‘BigTechs’ into financial services, the Swedish payments outfit have responded reversing the trend and adopting some of the ‘BigTech’ trademark services such as shipping services, whilst integrating with others such as GooglePay.

They have also proven the plaudits of partnership over competition as they initiated several new, and extended several existing partnerships with key players across markets.