By Jasmine Glasheen
Consumers are weary of credit cards and the interest that comes with them. However, they’re highly interested in alternative payment options. Buy now, pay later solutions are catching on like wildfire across the UK.
A recent European Payments Council report found that 17% of English consumers said that the availability of different finance options is the most important factor when considering a purchase, and a whopping 36% said that they would shop again at a retailer that offered buy now, pay later options at check out.
If you still aren’t convinced, consider the fact that 30% of all U.S. customers already have a buy now, pay later account. And UK retailers that offer buy now, pay later options see increased customer loyalty and repeat purchases, increased basket conversions, and sales boosted by up to 30%.
The European Payments Council reports, “A third of UK shoppers perceive retail finance as a convenient way to spread the cost of expensive purchases, and nearly one in five name the availability of different finance options as the most important factor when making big-ticket purchases.”
It’s clear that it’s high time for you to hop aboard the buy now, pay later train if you haven’t already. But not all buy now, pay later options are created equally. There are a few factors to consider when wading the deep sea of alternative payment services providers. These factors include, but aren’t limited to:
- Reliability: how often do checkout issues with this payment processor arise?
- Accessibility: how easy is this platform to use? Do customers have to create an additional account to use it?
- Price: how much does this buy now, pay later solution charge customers to use it?
- Awareness: is the trust there? Will consumers be familiar with this payment option?
- Adoption: does this financing option already have a loyal customer fanbase, or will your company have to do all of the promotional campaigns in-house?
- Reputation: what do current platform users say about its efficacy?
Partnering with the right payment platform is half of the battle. Customers won’t hand over their precious payment data to just anyone, so you want to align yourself with a company that you (and your customers) can trust.
Let’s talk about Klarna
Klarna is a buy now, pay later platform that enables customers to take home items immediately and pay for them later, breaking down the cost of purchases into 3 interest-free installments. (And we’re willing to bet your customers’ credit card company doesn’t offer an interest-free option.)
Retailers who offer Klarna as a payment method at checkout see a 68% increase in average order value from shoppers paying with installments… 44% of whom say they would have abandoned their purchase if an installment payment option wasn’t available.
Up until now, Klarna was only available for use with online checkout, so physical retailers had to look on from the sidelines while online retailers boosted their market share.
However, thanks to Klarna’s new integration with Vend, brick-and-mortar stores can get in on the fun, too. Vend is the first and only in-store integration for Klarna –– making Klarna’s in demand buy now, pay later technology accessible to all retailers across the UK.
With Vend + Klarna, UK retailers can start offering ‘buy now pay later’ in-store. Your shoppers who want an alternative payment method now have the option to use Klarna at checkout, so they can take home a product immediately and pay for it in 3 installments interest-free.
How is Klarna different?
So, why do some of the biggest brands in the UK choose Klarna over other buy now, pay later platforms? Besides a sleek user interface, on-site promotional messaging options, and customized data-driven insights, Klarna comes with its own built-in fan base of shoppers: 4 million unique consumers visit Klarna’s Shop Directory each month, Klarna’s shopping app has 7.8 million monthly active users, and it makes 50 million social media impressions every month.
Klarna is the most downloaded “pay later” app in the world. Seasoned shoppers look for it at checkout. And 85% of shoppers who use Klarna say that it’s a better checkout experience than other online checkout options. That’s because 99.92% of purchases made with Klarna happen absolutely seamlessly, without incident or customer complaint.
Online retailers who offer Klarna at checkout report a 30% increase in online conversions, compared to the average 20% increase in conversions from retailers who add any buy now, pay later option. That means that, by choosing Klarna, you can increase conversions by over 10% compared to retailers who use other buy now, pay later platforms. And a whopping 30% more than retailers who don’t offer it at all.
Klarna also protects your customers by not charging them for the cost of a product if their purchase isn’t delivered, improving customer service and customer satisfaction when supply chain issues arise.
How does Klarna work?
So, how exactly can your customers use Klarna as a payment method? That depends on whether they’re shopping online or in-store.
Online shoppers see Klarna as a simple buy now, pay later button at checkout, and they don’t even have to create a separate account. You also have the option to enable a personalized Klarna pop-up when consumers visit your site, so they know what payment plan they qualify for while they browse your inventory –– potentially inspiring customers who are on the fence to make a higher-ticket purchase.
Using Klarna at brick-and-mortar stores is super easy. Retailers just need to enter or scan the customer’s unique barcode from their Klarna app directly into Vend ePOS and the sale is done.
How to pay with Klarna
Klarna gives customers 30 days to pay after their order is shipped or taken home without any fees or interest, so it can mean the difference between making or losing a sale at checkout.
The Klarna app also has that built-in userbase of 7.8 million monthly active consumers that we talked about earlier –– so you don’t just gain sales from your own customer demographics… you can tap into their existing customer base! Offering Klarna at checkout is a great way to reinforce the community surrounding your brand.
And the best part? Klarna pays merchants instantly and takes on the fraud and credit risk for you, so you get paid straight away for each sale without the hassle or liability. This way you don’t have to stress over customer credit approval and processing, and can instead focus on running a successful retail business.
What stores accept Klarna?
Klarna is the most popular buy now, pay later platform in the world –– providing payment services to over 100,000 online stores and 60 million online customers.
And as of today, physical retailers can also get in on the fun. Let your store be one of the businesses that are benefiting from ‘buy now, pay later.’ Check out how Vend + Klarna can help you increase sales and serve shoppers better in 2020 and beyond.
About Francesca Nicasio
Francesca Nicasio is Vend's Retail Expert and Content Strategist. She writes about trends, tips, and other cool things that enable retailers to increase sales, serve customers better, and be more awesome overall. She's also the author of Retail Survival of the Fittest, a free eBook to help retailers future-proof their stores. Connect with her on LinkedIn, Twitter, or Google+.