Sunday , September 20, 2020

Klarna Sees Both Online And In-Store Volumes Grow as the U.S. Market Looms Large

Online volume has soared for Klarna AB but the Swedish payments company’s efforts to go into physical stores are also bearing fruit, the company reported early Thursday.

Klarna, which offers consumers the opportunity at checkout to extend payments over time, reported its “in-store proposition” is now active in 10 geographic markets, including the United States. The option, available with contactless capability, is live in more than 13,000 stores, with transaction volume up 75% from the first half of 2019.

Overall, 15-year-old Klarna’s service claims roughly 85 million users and works with 235,000 retailers, with 35,000 added in the year’s first half. Of the user population, some 12 million now use the Klarna app, the company reported, nearly double the number a year ago.

Klarna launched the app in the U.S. market last summer and has seen monthly active users quadruple since then. Globally, “We currently see approximately 45,000 app installs every day … which is [three times] as fast compared to the same period last year,” the company said in its first-half report. Klarna’s service has also been available in Apple Pay since January and this month became a payment option in Google Pay.

With physical point-of-sale volume growing and consumers turning to card-not-present channels in the face of the Covid-19 pandemic, total payment volume grew 44% in the first half of the year, Klarna reported. The company added 14 million users overall in the first six months, though growth in this metric is particularly strong in the U.S. market, where the number grew nearly 550% year-over-year in the first half.

Indeed, the U.S. market now looms large for Klarna and is “soon going to become our largest market,” possibly by year’s end, chief executive Sebastian Siemiatkowski told the Reuters news service Thursday.

Privately held, Klarna raised funds last year at a valuation of $5.5 billion. In March, China’s Ant Financial took an unspecified position in the company that reportedly came to less than 1% of its equity.

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