Klarna (a site that lets you buy now and pay later) has just become Europe’s highest valued fintech firm - they’ve got over 12M users and have just raised £500M in a funding round.
I’ve used Klarna in the past but stopped as I actually thought it made me spend way more money on clothes than I need to.
Have you used Klarna before/ or think you’d give it a go?
Ah … Interesting perspective: “spend more than I need to”. I think the time when people only bought what they needed is long gone - most of what we spend money on is stuff we WANT not stuff we need. Of course Klarna makes it easier to get stuff you want (aka stuff you don’t need). And isn’t that the point of Klarna: to help people get what they want regardless of need?
I wondered what’s the real difference between purchasing via Klarna vs credit card? It’s surely just another line of credit. Their valuation is surely tied to their accessibility (merchant take up and consumer qualification). Get a bunch of widely used merchants on board, lower the threshold for consumer qualification and suddenly you’re highly accessible.
I assume the merchant funds the interest and the admin costs (in a world of low interest rates and cashback incentivised offers that’s not so hard). Everywhere I turn I can get a discount on almost everything by buying via an intermediary that drives my business to that merchant and splits the cashback with me.
I don’t know if the consumer qualification is underwritten by the merchant or if it’s like Visa and Mastercard (each consumer qualifies their own credit line.)
With access to a large low interest credit line (my offset mortgage) Klarna doesn’t really hold much appeal for me. I’ve never been an impulse buyer - I generally put things I want in my basket and then go search for a better deal. Often I find one. Sometimes I find a review that puts me off. Sometimes I find a better/cheaper alternative. Sometimes the merchant sends me offer to incent me to complete the purchase. Often, by allowing myself to slow down the purchase, the urge to spend decays and I’ll delete it from the basket.
I’ve even experimented with gamifying the money I “save” (avoid spending) to make it more fun to not spend - which levels the playing field a little.
Oh yeah they got me for a while - when money isn’t coming out of your account in that moment, it’s tempting to order more with the intention you’ll only keep your fave things. Didn’t always happen though haha
Hmm I see it as quite a young company, so I wonder how many of their target audience has a credit card? They’re also pretty quiet on the risks involved with buy now, pay later so I wonder if people think there’s less risk involved with Klarna vs a credit card? 
I find it quite staggering how valuable Klarna is to their clients; the increase in shopper’s spending amount and frequency is almost unbelievable (although I wonder whether this factors in returns? I suspect not).
Yeah considering how many retailers now offer Klarna as an option, it must be doing something right!
Would be interesting to see the return rates for orders placed with Klarna vs normal payment…
They have killed the game! Good concept and will increase e-commerce sales but I just pray people can who opt for that route actually have the funds 
and no increased debt.
Agree!
This blogger has done some brilliant work around regulating buy now, pay later schemes if you’re interested!
Really interesting article here where someone shares how they were denied a mortgage with HSBC and Barclays because they’d used Klarna (despite never missing a repayment!)
It really makes you think that BNPL schemes should do more to educate their users on the consequences of using this type of scheme…