With consumers eagerly embracing buy now, pay later payment options, Stripe Inc. on Tuesday announced it is partnering with BNPL powerhouse Klarna AB. The deal will enable Stripe merchants to offer Klarna BNPL loans to consumers in the United States and 19 countries throughout Europe.
The deal also adds to Stripe’s growing arsenal of BNPL payment options. Stripe already partners with other providers, such as Afterpay Ltd., which partnered with Stripe in February, the company says. Square Inc. acquired Afterpay in August.
In addition to offering Klarna as a BNPL option, Stripe will become Klarna’s preferred payments processor and will handle about 90% of Klarna’s volume in the United States and Canada. Stripe previously provided payment processing to Klarna, but declined to reveal what percentage of Klarna’s volume it handled.
One advantage of offering BNPL is that the payment option can dramatically increase conversions and boost revenue for merchants, Stripe says. Research by Klarna reveals that businesses offering Klarna at checkout can increase conversion by 30% and boost order value by 41%, on average. In addition, some merchants have seen a 40% uptick in new customers since offering Klarna.
“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 retailers of all sizes, allowing them to maximize their entrepreneurial success through our joint services,” Koen Köppen, chief technology officer at Klarna, says in prepared statement. “By offering convenience, flexibility, and control to even more shoppers, we create a win-win situation for both retailers and consumers.”
Stripe views its partnership with Klarna as a way for merchants to offer increased payment flexibility to consumers at a time when consumers are looking to boost their purchasing power by spreading payments for purchases over time.
“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,” Will Gaybrick, chief product officer for Stripe, says in a prepared statement.