Klarna plans global expansion using Risk Algorithm

Tuesday 4 February 2014 11:02 CET | News

Sweden-based online retail payments company Klarna has revealed plans to expand outside the region as the company forecasts rising e-commerce volume from retailers eager to let it assume their credit risk.

Klarna is interested in both the US and Japan. Klarna wants to be present in all of Europe and also to expand globally.

The company uses an algorithm with over 200 variables measuring client risk. They include previous purchases, the time of the day the customer buys goods, the frequency of purchases and even how shoppers type their names. Some 50 of the company’s total 1,000 employees work with assessing customer risk.

The company says that when it comes to online payments in general, only 33 out of 100 people who proceed to checkout on a desktop actually make the purchase, meaning that almost 70% of customers disappear during the payment process.When using a Klarna checkout, conversion is considerably much higher (>60%) - and equally high on mobile.

Klarna offers payment solutions such as a one-click purchase option for a range of online storefronts across Europe and did USD 200 million in revenue in 2013. It has 15 million users and 15,000 merchants in Sweden, Norway, Denmark, Finland, Germany, the Netherlands and Austria. The company has raised USD 250 million in funding from investors including Sequoia Capital, DST and General Atlantic.

In recent news, Klarna has purchased German payment systems provider Sofort for USD 150 million.

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Keywords: Klarna, Risk Algorithm, global expansion, rising e-commerce, credit risk, online retail payments
Categories: Payments & Commerce
Countries: World
This article is part of category

Payments & Commerce

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