Thursday 27 August 2020 9:47 am

Klarna sales rise as lockdown sends shoppers online

Payments provider Klarna said strong demand in the US and UK helped the value of transactions carried out via its payment platform grow in the first half of the year.

The figures

Klarna reported growth in total net operating income of 36 per cent year-on-year, as demand grew.

The value of transactions carried out via its payment platform jumped 44 per cent in the first half of the year as customers embraced online shopping during the pandemic.

The Klarna card is currently available in Sweden and Germany and the number of issued cards to new users have doubled while volumes increased by more than 250 per cent.

Why it’s interesting

The payments and shopping provider said it had added more than 35,000 retailers to its existing 200,000.

It also said it had added 14m consumers, with particularly strong growth in the US and UK where the number grew 550 per cent and 120 per cent respectively compared to the same period last year.

Klarna offers a “buy now, pay later” service which allows customers to pay for items in four installments for items online, but it has faced criticism as shopper’s credit scores have been affected,

Its in-store offering is now live in 10 markets and even despite the shift to online, triggered by coronavirus, volumes have grown more than 75 per cent compared to the same period last year across more than 13,000 stores.

Klarna’s largest market continues to be the US with almost 9m customers, as they shift away from credit cards. The app currently has 1.2m monthly active users.

What Klarna said

In a letter to shareholders, chief executive and co-founder Sebastian Siemiatkowski said: “In the context of Covid-19 and the uncertainties it has unfortunately created for so many, a somewhat precautionary approach was necessary at times, including adjusting our credit policies globally.Despite this, we have seen accelerated growth and rapidly increasing demand for our services.”

“Klarna has in fact never been more relevant, both by design but also because we are in a fortunate position as global innovators in e-commerce and retail.”