Klarna takes on crowded NZ market
Swedish ‘‘buy now, pay later’’ operator Klarna has joined the array of part-payment providers in New Zealand, promising to tackle a ‘‘broken’’ banking sector.
Klarna chief executive Sebastian Siemiatkowski said the company offered more than the traditional buy-now-pay-later payment system. Its app allowed users to shop at a range of stores, including those that had not signed up with Klarna, create wishlists, keep detailed track of spending and calculate their carbon emissions.
Siemiatkowski said Klarna began as a way to resolve some of the disadvantages of using a debit card online, including security, as well as to provide easy returns and boost customer satisfaction.
‘‘If you look at what we do today, our ambitions have expanded beyond that – we realised that retail banking and the credit card space is really broken.’’
A buy-now-pay-later model flattened borrowing costs, making it free for all consumers – unless they missed a payment – and shifting the costs of consumer borrowing to merchants who could factor it into their business, he said.
In New Zealand, 10 per cent of online purchases were made with some sort of buy-now-pay-later app last year, according to the 2021 Global Payments Report.
Credit cards accounted for 32 per cent of payments, and debit cards accounted for 15 per cent of online purchases.
Just 12 per cent of in-store purchases were made with cash.
Klarna was looking to differentiate itself from existing competitors in New Zealand by offering a wider range of services.
There were plans to expand to match what the company offered overseas, Siemiatkowski said.
‘‘In Europe, we are the competitor of PayPal. We have buy-now-pay-later, but we also have buy now, where you pay the full amount when you pay online, but you get a one-click experience, and then we offer a number of other services in other markets.’’
In March, Klarna was valued at US$31 billion (NZ$43 billion).
The company had 90 million active global users in 17 markets and processed 2 million purchases a day.
ASB customers will be able to sign up to Klarna via the ASB mobile banking app. ASB’s parent company, Commonwealth Bank of Australia, has an investment stake in Klarna.
While Klarna currently has no New Zealand-based employees, the company was looking to hire 20 people locally in the near future, Siemiatkowski said.
The company conducts a credit check of each customer before they are able to use Klarna, each transaction is assessed and approved individually, and a hold is put on accounts that are unable to pay.