Klarna’s alternative payment methods and checkout services are continuing to resonate strongly with consumers, merchants and partners across its 14 core markets, as Europe’s leading payments provider and a newly-licensed bank reports a 36 percent rise in sales volume in 2018 as well as a 31 percent lift in revenue.
In its annual financial report for 2018, Klarna has revealed that it received an average of 1 million transactions a day on its platform, which helped its total global sales volumes rise by 36 percent year-on-year in 2018 to 29 billion US dollars. The rise in volume follows a 31 percent lift in revenue to 627 million US dollars in 2018.
In addition, Klarna added 25,398 new merchants globally in 2018, marking growth of almost 25 percent compared to 2017. Klarna now provides payment services to over 130,000 retailers in a wide range of verticals across markets, including adding the likes of H&M, Cos, & Other Stories, Monki, Weekday, and Arket, to its existing global roster of brands such as Adidas, Zara, and Arcadia Group.
Klarna’s consumer base has also expanded rapidly, stated the payments provider, in the last quarter of 2018, 25,000 new UK consumers each week decided to Pay later with Klarna, and in total it welcomed more than 26 million new consumers in 2018.
Luke Griffiths, UK General Manager for Klarna said in a statement: “2018 has been a phenomenal year for us. Klarna has led the market in establishing an entirely new category with Pay later, that has proved hugely popular with today’s savvy consumers expecting more flexible, personalised and intuitive ways to shop. As a result, in response to demand from customers, we’ve seen a significant rise in the number of retailers adopting Klarna solutions in the last 12 months. This includes some massive global brands like IKEA and H&M joining the family, with the pipeline ahead just as strong.
“At the same time, to turbocharge future growth, Klarna made a strategic decision at the start of 2018 to significantly increase investments in people, systems and products in order to further strengthen capabilities and support future business plans. And with more and more consumers using and loving our offering, we feel very optimistic that this trajectory will continue. ”
UK leading the way for Klarna’s Pay Later
Research also reveals that Klarna users are “highly engaged and loyal”, and as their preference for Klarna’s flexible payment options continues to grow, with the payment provider stating that many markets are seeing up to 70 percent of consumers making repeat transactions during the year.
In the UK, there are 4.4 million Klarna users across all available payment options in the UK market — Pay now (via card), Pay later and consumer finance, and over 70 percent are repeat purchasers, and after introducing Pay in 3 instalments, retailers saw a 55 percent increase in AOV and a 44 percent increase in conversion.
The biggest success story for Klarna in the UK is Pay later, which lets shoppers buy now and pay for goods up to 30 days later, completely interest and fee free, and in the last quarter of 2018, 25,000 new UK consumers each week decided to Pay later with Klarna. On average, a Klarna Pay later user in the UK does 8.6 transactions per year, which Klarna states shows “strong affinity for this unique customer-centric payment option”.
This has driving strong demand amongst merchants and led to “significant growth” in Klarna’s UK merchant base, with new retailers during 2018 include In The Style, Missguided, Swoon, Moss Bros, Beauty Bay and Gymshark, alongside Klarna’s existing retailers like Asos, Topshop, Schuh and JD Sports. In all, Klarna UK currently has over 3,500 active UK retailers.
Griffiths added: “The UK has significantly contributed to Klarna’s global growth with new merchants and heightened consumer usage, which have increased our UK footprint dramatically. Our relentless focus on customer experience, combined with a diverse payments portfolio, have differentiated us in the market and are clearly resonating with shoppers who want financial flexibility, convenience and choice. This winning formula will support our continued success through 2019 and beyond.”
Image: courtesy of Klarna