For Xero’s customers, offering Klarna’s alternatives to traditional credit means they can get paid up front while their customers don’t have to worry about high interest rates and hidden fees.
Klarna offers an alternative to credit cards with strong guardrails which enable responsible spending. Klarna checks a consumer’s eligibility before approving each purchase and provides a clear instalment plan with friendly reminders to help shoppers keep on top of their payments. These guardrails mean 99% of lending is repaid and 40% of orders are repaid early.
Commenting on this news, officials from Klarna said this partnership brings Klarna’s flexible payment options to micro businesses of all kinds so business owners can get paid on time and their customers can choose how and when to pay. This includes businesses where gardeners and landscaping services using Xero can now offer a Klarna BNPL payment option, plumbers and heating engineers using Xero can fix their customers’ boilers and let them spread the cost while small businesses involved in the construction industry could spread the cost of smaller projects over three interest-free instalments.
In a reply, Xero’s team said they know that maintaining a healthy cash flow is critical to a successful business, and offering more ways to pay supports increased business growth and getting paid faster. In fact, their new research report shows that if a business doesn’t offer customers their preferred way to pay, they are prepared to take their business elsewhere. By enabling their customers with more ways to pay, including Klarna, they can help them retain customers and increase their revenue.
In September 2024, Klarna has augmented its AI-powered shopping assistant with new chat-based features, offering personalised product recommendations, price comparisons, customer reviews, and real-time price insights. The AI assistant streamlines the shopping experience by helping users find the right products at the best price through an intuitive chat interface, supporting informed purchasing decisions.
These new features align with Klarna's vision to revolutionise shopping and financial services by leveraging AI. By integrating advanced large language models with Klarna’s user interface, the company aims to challenge big tech players and deliver a smoother, AI-driven shopping experience.
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