Klarna launches in US(klarna.com)
klarna.com
Klarna launches in US
https://www.klarna.com/us
24 comments
Hard to look past the success they've had elsewhwere but I'd be surprised if this flies in the U.S. Just sounds like a lot of extra clunkiness with modest or no benefit to anyone (besides Klarna, of course). Many/most Americans are way overextended as it is.
I think it's better to see them as a payments platform.
You may be right that U.S. customers won't prefer paying by invoice en masse -- and Klarna checkout offer that too.
Some consumers prefer immediate [debit card] to deferred payments [invoice or credit card], others want it the other way around.
Internet retailers can use Klarna's payments platform to enable both immediate and deferred payments.
You may be right that U.S. customers won't prefer paying by invoice en masse -- and Klarna checkout offer that too.
Some consumers prefer immediate [debit card] to deferred payments [invoice or credit card], others want it the other way around.
Internet retailers can use Klarna's payments platform to enable both immediate and deferred payments.
> you will receive an invoice with the product - so you don't pay until you have it. Furthermore, they'll give you 30 day credit, and can even split the payment over several months (3, 6, 12, 24 or 36) for an extra fee.
How is this different and better for me than a credit card? Using a credit card I don't have to pay until the end of the credit cycle, which usually is after I receive the product, and pay over a longer term for the 'extra fee' of interest. The credit card company also reverses charges for items I don't receive, protects me from fraud (over $50), and provides a host of other services such as frequent flier miles, insurance, etc.
Also, what are their interest rates?
How is this different and better for me than a credit card? Using a credit card I don't have to pay until the end of the credit cycle, which usually is after I receive the product, and pay over a longer term for the 'extra fee' of interest. The credit card company also reverses charges for items I don't receive, protects me from fraud (over $50), and provides a host of other services such as frequent flier miles, insurance, etc.
Also, what are their interest rates?
> How is this different and better for me than a credit card?
Klarna let you choose between invoice and credit card in their checkout (which is embedded in the retailer website, similar to other payment solutions).
Although they started out with invoices, I think they are better described as a payments platform these days.
> what are their interest rates?
According to this document[1] on Germany, 10% - 15%. I found it through a Google search, don't know if it holds for the US.
[1] https://cdn.klarna.com/1.0/shared/content/legal/terms/2/en_d...
Klarna let you choose between invoice and credit card in their checkout (which is embedded in the retailer website, similar to other payment solutions).
Although they started out with invoices, I think they are better described as a payments platform these days.
> what are their interest rates?
According to this document[1] on Germany, 10% - 15%. I found it through a Google search, don't know if it holds for the US.
[1] https://cdn.klarna.com/1.0/shared/content/legal/terms/2/en_d...
Well, I guess the main driver is "one click buy" (tm) - that you don't have to bother with spending time on entering the credit card details, security questions, etc.
You click "buy" and then you are done. Off course, later you will have to do all the boring stuff...
You click "buy" and then you are done. Off course, later you will have to do all the boring stuff...
Is the difference between old (credit card) and new (Apple Pay, Klarna) payment services is merely UI? That is, credit cards require either a card reader or for the user to type in lots of digits, and the new services are one click.
> (and also used in the other Scandinavian countries)
I've been living in Norway since 1986 and have never heard of them.
Although paying by invoice is quite common for services (builders, car mechanics, etc.) it is less so for goods unless you are a company. Invoices and direct bank transfer used to be the usual way for pretty much everything but is, I think, becoming less common all the time except for high value goods like cars where most people's credit cards would not have a high enough limit.
I've been living in Norway since 1986 and have never heard of them.
Although paying by invoice is quite common for services (builders, car mechanics, etc.) it is less so for goods unless you are a company. Invoices and direct bank transfer used to be the usual way for pretty much everything but is, I think, becoming less common all the time except for high value goods like cars where most people's credit cards would not have a high enough limit.
Shortly after moving from the US to Germany, I was asked to investigate Klarna as a solution for payment processing for my company. I was pretty ill-suited for it, as I had no idea about paying by 'invoice'.
Payment by invoice means that when you order a product online, you simply receive an invoice along with the product when it arrives, and you're trusted to pay for the item on the invoice within the next few days or weeks by way of a direct bank transfer.
I found the process quite foreign to me, but the availability of fast and cheap credit checks made this possible. Companies like Klarna maintain and/or license a database of people in the country who have a history of failing to pay their invoices, and they are denied when they order products from other websites in the future.
What I'm wondering here is, how are they going to pull this off in the US? There are credit checks, but they really only apply to whether you've made loan payments or declared bankruptcy recently, and wouldn't reflect if a company has a claim against you.
Payment by invoice means that when you order a product online, you simply receive an invoice along with the product when it arrives, and you're trusted to pay for the item on the invoice within the next few days or weeks by way of a direct bank transfer.
I found the process quite foreign to me, but the availability of fast and cheap credit checks made this possible. Companies like Klarna maintain and/or license a database of people in the country who have a history of failing to pay their invoices, and they are denied when they order products from other websites in the future.
What I'm wondering here is, how are they going to pull this off in the US? There are credit checks, but they really only apply to whether you've made loan payments or declared bankruptcy recently, and wouldn't reflect if a company has a claim against you.
I'm not so sure you have to be very thorough doing credit checks. Klarna has a rumor of making more money from customers who don't pay (on time) than from those who do. Added late-fees and selling the invoices to companies who handle bad credit can be pretty lucrative.
It's not a rumour, it's their business model.
I a have no opinion on it myself, but that's how they roll,
they collect debts.
The initial invention was this very quick algorithm for risk assessment.
What they do really quick is a credit check, based on what they know. They may also use third party suppliers the first time (or more?) if they do not have enough data.
I am not actually sure if they "buy" the invoices, but they collect a fee for reminders and handling if the payment is late.
What they do really quick is a credit check, based on what they know. They may also use third party suppliers the first time (or more?) if they do not have enough data.
I am not actually sure if they "buy" the invoices, but they collect a fee for reminders and handling if the payment is late.
Well, nowadays klarna is offering more payment options other than invoice, and that's (one) way to build clients' database. If for example, you used credit card, perhaps you'll be eligible for invoice the next time you pay.
They are probably doing the credit checks themselves, by aggregating a bunch of public and or private data and doing the analysis on their own.
So for the HN crowd they might be famous for being a successful company using Erlang.
All I really know is that they are all over the place if you go online shopping here in Sweden, they probably handles payments for a majority of online shops here, or a very large chunk of it at least.
All I really know is that they are all over the place if you go online shopping here in Sweden, they probably handles payments for a majority of online shops here, or a very large chunk of it at least.
I knew about these guys just because they were mentioned somewhere as big users of Erlang :)
This may just be Sunday-brain, but I can't seem to see what this service actually does - is it effectively just an outsourced credit-control department?
If so (and even if not, to be honest), I do find it interesting how often something pops up that seems to be a return to older ways of doing things. In this case, I'm reminded of how things worked in my early childhood (1980s, UK) - our local butcher, petrol station and others would all keep an account, which my parents would pay off when invoiced. In the context of the last 15-20 years, though, that appears old-fashioned to the extreme - yet here we are reinventing new ways of doing things the old ways.
If so (and even if not, to be honest), I do find it interesting how often something pops up that seems to be a return to older ways of doing things. In this case, I'm reminded of how things worked in my early childhood (1980s, UK) - our local butcher, petrol station and others would all keep an account, which my parents would pay off when invoiced. In the context of the last 15-20 years, though, that appears old-fashioned to the extreme - yet here we are reinventing new ways of doing things the old ways.
For one thing, it offloads the risk inherent in online transactions -- you buying an iPad and getting a brick and the seller actually getting her money.
Second, it makes dealing with payment a _lot_ easier for any internet business. You know the headlines from hacking where a lot of credit card numbers are stolen. Using Klarna, the internet company does not have to handle credit numbers by offloading that whole thing to a trusted third party.
An online store using Klarna is really a stamp of quality on that business.
Disclosure: I'm writing this from Sweden where Klarna is based, but I am not affiliated with the company. I did some research into online payment for a customer (a municipality) a while ago and came across Klarna.
Second, it makes dealing with payment a _lot_ easier for any internet business. You know the headlines from hacking where a lot of credit card numbers are stolen. Using Klarna, the internet company does not have to handle credit numbers by offloading that whole thing to a trusted third party.
An online store using Klarna is really a stamp of quality on that business.
Disclosure: I'm writing this from Sweden where Klarna is based, but I am not affiliated with the company. I did some research into online payment for a customer (a municipality) a while ago and came across Klarna.
Mm, I'm not speaking against it by any stretch, just to be clear. To be honest, I like the approach more - there's a lot to be said for more pervasive trust in commerce between vendor and customer; it feels nicer to me.
Naturally there are related problems that one has to solve, but the major one (unintentionally extending credit to someone you shouldn't have) is, I think, a lot less of an issue than commerce at large instinctively thinks.
Naturally there are related problems that one has to solve, but the major one (unintentionally extending credit to someone you shouldn't have) is, I think, a lot less of an issue than commerce at large instinctively thinks.
Stripe does all of that.
What klarna allows, is that you can pay with credit as a person without owning a credit card.
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When you order a product online, you will not pay by credit card. Instead, you will receive an invoice with the product - so you don't pay until you have it. Furthermore, they'll give you 30 day credit, and can even split the payment over several months (3, 6, 12, 24 or 36) for an extra fee.
It's pretty easy to pay by installments. You get the invoice with the full amount to pay. If you then pay a lower amount (e.g. full_amount/12 to pay over 12 months), you will automatically be transferred to the split plan, and get a new invoice every month for 10 months.
I think it's very used in Sweden, where they've had an habit of paying via invoice instead of credit/debit card for years.
Klarna tried a few years ago to enter the market here in Denmark, but I don't think it has been a huge success. People in Denmark are more used to just pay with credit card, and I think that's the same problem Klarna will face in the US.