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Klarna expands and strengthens UK

Updated on August 7, 2022

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With ‘Pay Now’, UK customers can use Klarna to pay for goods and services promptly and in full.
Part of a broader set of improvements aimed at raising the bar for the UK payments industry as a whole.
Clear checkout language, simpler T&Cs, enhanced complaints processing, and the elimination of the last remaining late penalties are all examples.

It’s the 18th of October 2021 in London. Consumers in the UK will now be able to choose from a wider range of payment options as well as a greater degree of clarity and control over how they pay. “Pay Now” ensures that the same payment experience is available to UK customers everywhere Klarna is offered, whether they choose to pay now or later.

As part of its ongoing efforts to set standards for the UK payments industry, Klarna is removing the last remaining late fees from its regulated financing product, strengthening affordability checks and checkout language, and providing more ways for customers to challenge complaints decisions when necessary. All of these changes take effect immediately.

allowing customers to choose between paying now and later

Klarna is best known in the UK for its Buy Now Pay Later (BNPL) service, but it also provides a wide range of payment and shopping services around the world, and its ‘Pay Now’ fast payment option is immensely popular.

Consumers in the United Kingdom can now choose from a wider range of payment choices, all of which are offered in 20 different markets across the world.

Pay Now is part of a broader set of measures aimed at improving the consumer payments business in the United Kingdom.

Open banking services from over 6,000 institutions in 20 countries have already been tapped into by Klarna as a way to improve real-time lending choices. Customers will be able to securely share their income and expenditure data from their bank accounts to prove that they can afford future repayments in addition to the thorough checks that Klarna runs on each and every purchase.

Providing secure access to credit for those with minimal conventional credit history, which is dependant on the use of traditional credit and does not reflect how people are opting to make payments today, is in line with Klarna’s financial inclusion mission.

It is Klarna’s goal to enable all buy now, pay later suppliers to share their data with the UK’s Credit Reference Agencies.

The vast majority of Klarna customers who responsibly utilize BNPL will see their credit ratings improve as a result of this work, which will also serve to safeguard them from additional debt accumulation.

BNPL options are clearly defined as credit products with penalties for missing payments as part of Klarna’s ongoing commitment to lead the way in transparency and protection for customers throughout their shopping and payment experiences.

To ensure that the terms and conditions are understandable and clear, it has collaborated with Fairer Finance, a consumer group.

Klarna has also formed its own complaints adjudicator for customers who are still unsatisfied with the response they have received from the company.

The Financial Ombudsman Service (FOS) told Klarna that complaints involving BNPL products could not now be referred to FOS on a voluntary jurisdiction basis.

This program, which has been in operation for more than six months, gives customers a useful avenue of redress when they are dissatisfied with the way a complaint has been handled.

Klarna’s Pay in 30 and Pay in 3 BNPL products in the UK do not levy late fees. All late penalties will be removed from regulated Financing, which consumers utilize to extend the expense of larger purchases over a period of six months to 36 months. As a result of this adjustment, customers can rest assured that no matter which Klarna product they use, they will not be charged late fees.

A statement by Klarna Co-Founder and CEO Sebastian Siemiatkowski: “We truly think that most of the time, individuals should pay with the money they have, but there are specific times where credit makes sense. In these situations, our BNPL products provide a cost-effective and long-term solution to the problem of high-interest credit cards. Consumers will now have complete control over their payments, regardless of whether they choose to pay now or wait.

ENDS

To the editors, here are some notes:

How the new checkout at Klarna works.

A single Klarna button has been added to the payment options available to customers at an online checkout. With Klarna, customers can choose to pay immediately with a debit or credit card or over 30 days or three instalments with no interest and no fees. Financing for larger purchases with Klarna is also accessible through retailers that have been authorized to do so. Payment history is available to customers via the Klarna app, regardless of how they make their purchases.

The single Klarna button simplifies the checkout process for retailers and increases conversion rates.

Nearly all of the UK’s merchants expect to accept instant payments by the first quarter of 2022.

What do you know about Klarna?

Shopping with us is a breeze. In order to purchase what they want today, consumers can use Klarna, which allows them to buy now and pay for it later. Payments, social shopping, and personal finances are all part of Klarna’s service to consumers and retailers. Klarna’s revolutionary online and in-store purchasing experience is made possible by the contributions of over 250,000 retail partners. In terms of private fintechs, Klarna is one of the most highly valued, with a market capitalization of $45.6 billion. With over 4,000 workers and operations in over 20 countries, Klarna was established in 2005. Visit klarna.com for additional details.

When it comes to Klarna Open Banking,

To comply with the Payment Services Directive, Klarna’s Open Banking solution, which processes over 200 million transactions annually and connects to over 6,000 banks, provides third-party providers with simplified access to customer bank account data via ‘Account information’ (AIS) and ‘payment initiation’ (PIS) services (PSD2). Consumers who want to maximize the value of their financial data can use the safe solution to better understand and engage with their money.

In the Interest of Fairer Finance

As a ratings agency, consulting, and consumer advocacy group, Fairer Finance strives to make the financial services industry more equitable. Campaigning, releasing product and customer experience ratings, and partnering with enterprises who desire its aid and expertise to improve customer outcomes are some of the ways it accomplishes this goal.