firoz patel digital payment

The cost of a new way to pay

Online retail giant recently revealed a new checkout service borne from the Swedish payment solution company, Klarna. The partnership is still in its infancy, and Overstock admits that this is very much a testing period to see how customers respond to the integration of this new system into the buying process. But what was the reasoning behind the introduction of Klarna to a new audience? Well, it’s pretty clear once you understand how Klarna works. This system allows users to purchase products through Overstock simply by typing in their email and shipping address and perhaps their phone number. With Klarna, there is no need to type in your credit card information. 

Considering the growing amount of time that consumers spend on their mobile devices, it’s no surprise that many retailers are looking for the best way to enhance the user experience when it comes to a digital interface. Retailers like seek payment systems that make it as easy as possible for the consumer to buy.

Klarna addresses this with a system that combines the ease of Apple Pay or Android Pay with the “one click” element of buying something through something like Amazon’s app. The difference is that with Klarna, you aren’t limited by your device or the specific site that you’re visiting to utilize the service. Klarna works on various platforms and on many different sites.

When a user types in their email address, Klarna’s system almost instantly decides if it can allow you credit, by analyzing public and private data about you as a consumer. If the system deems that you qualify for this mini-loan, then it allows you to place your order and have 14 days to provide payment information. This system has already proven to be not only effective, but powerful in places like Germany, where almost nobody uses credit cards.

In coming years we will see how the system fairs in other countries with similar buying habits.

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