ASHLEY GOLDSCHMID: Hi, everyone. Thank you all for joining us today. My name is Ashley Goldschmid. And on behalf of all the Klarna crew, we’re really excited to have you here. In this session, we’re going to dive deep into how you can foster the Klarna Network to really expand your reach, boost conversion, and stay ahead of the payment trends that are impacting commerce today. 

When you think about Klarna, you obviously think of buy now, pay later, but we’ve been really focused on how we can reimagine what that really means. We think it’s more than just providing a flexible way to pay, but actually being a true acquisition engine for our partners, where we can drive loyalty, growth, and increase in customer engagement overall. And through our partnership with Stripe, we’ve been able to supercharge that even further. 

So for our joint brands, we’re going to dive into, in this session, a little bit of the ways that we’ve been able to provide that incremental growth, conversion, and increased customer engagement. 

We also, in the previous session—it was just announced our partnership with Link. So we’ll talk a little bit about what that looks like, how we’re really excited about it, and how it can drive conversion as well. 

So let’s dive in. Klarna is the largest buy now, pay later provider globally. We work with over 93 million active consumers, and that results in around $100 billion in processing volume annually, across over 45 markets that we serve. Between the 2.9 million transactions that we’re processing a day, we’re one of the fastest growing consumer brands in the world. 

And our reach truly is global. When you think about Klarna, you obviously think about the expansive markets that we work in today. And this has been a true identifier and competitive advantage that we have when we’re working with partners and we’re trying to win new deals. 

We’re able to expand together. So anytime our partners are trying to expand into a new market, our Klarna Network has allowed us to do that with basically a flip of a switch. So it’s a great, easy way to integrate with Klarna and expand effectively. This also means that when Klarna is moving into new markets, we’re able to do that, let’s say, as we’ve moved into France, Spain, Canada, Portugal—some of the markets that are newer to Klarna, and not our mature markets, we’ve been able to reach critical mass very quickly through the fact that we can just with the flip of a switch turn Klarna on to all of our existing network base. 

It’s also a competitive advantage. There’s a lot to be said about the fact that you can just have one integration, one contract, and have a global buy now, pay later provider. We are, like, still a localized payment method and a household name in a lot of the markets that we serve, in the EU markets, as well as in the US as well. And so that’s just one of the main competitive advantages that we have, is the fact that we can really scale with our partners effectively. 

Along with the global reach that we have, we also have a very extensive customer base. Truly everyone is using Klarna. This can be shown through the fact that over 80% of adults in our mature EU markets are using Klarna today. We also have very fiscally responsible shoppers, with a 99% repayment rate for their loan repayments. The overall average loan balance for Klarna transactions is only around $150. When you think about it from an overall average credit user being $6,000, that’s significantly less. 

And on the right-hand side, you can see our payment method split. It might be surprising to see that “pay in full” is around 25%. That’s really attributed a lot to the EU markets today, where utilizing debit with Klarna is much more heavily utilized. But when you think about the growth that we’ve had with on-demand everyday payment space, it’s truly becoming a competitive lever that we have, because shoppers are using Klarna for all different types of transactions, and it’s a great way for us to be able to provide a frictionless experience when maybe a pay later option doesn’t make sense for that transaction. 

On top of the consumers that we work with today, we have a very extensive merchant base. We have over 280,000 partners alone with Stripe. That number is continuing to grow, and we’re hoping to even double that in the next couple of years in our partnership together. 

You can see—you know, you probably think of Klarna as a tradition fashion retail, but we’ve really transcended into many different verticals and categories. Whether it’s ticketing, travel, lodging, everyday payments, you name it, we’re in it. 

What that really means is that as we expand and grow with new partners today, we’re able to truly provide value by the vast customer base that leverages Klarna for all different types of transactions and all different types of merchants. So that customer engagement and acquisition is a true value driver. But it’s not just about reach, it’s also about the numbers and what we can truly provide for our brands. 

When Klarna is enabled at checkout for our Stripe partners today, we see a tremendous business impact. As you can see, a 6.6% increase in overall volume and revenue with our Stripe partners. This can typically be attributed to the fact that when shoppers see that they have an available, flexible way to pay, they are more likely to add more items to their cart because their perceived purchasing power has increased. We see an 8% increase in customer engagement, and that’s really due to the fact that Klarna can drive that incremental buyer. When a shopper isn’t sure if they really wanted to check out, we’re actually able to convert more shoppers with the flexibility that Klarna offers. 

And finally, we have a 45% increase in purchase frequency when Klarna is available on a brand than when we’re not. That really drives—which we’ll show a little bit later—about how the Klarna app can drive that customer engagement, loyalty, and retention. But we’ve also focused on ensuring that Klarna can be enabled very simply on Stripe. 

So with our integration today, with just a few quick clicks, you’re able to have Klarna enabled on your existing checkout powered by Stripe. We’ve ensured it’s fast, simple, and fully Stripe native. And once Klarna is there, you obviously want to ensure that like what we’re saying about the impact that we provide, we truly mean it. And so you’re available to evaluate the impact through Stripe’s Optimized Checkout Suite, where you can customize rules, target segments, and specific buyers to really A/B test and see what Klarna is actually driving for your business. From an increase in AOV, increase in conversion, overall basket size, you name it, you’re able to see it. 

We’re also able to streamline operations. So we have seen around a 15% decrease in formal disputes when Klarna is enabled on a Stripe partner. Klarna is fully integrated in the Stripe disputes dashboard, so you never have to really leave the Stripe interface to deal with any operational burdens that come with Klarna. We’ve really built ourselves in mind so we can be fully embedded. 

And that’s not all. While we have fully revamped and focused on how we can grow with Stripe as a partner, we are also all in on AI. You probably have heard a lot in the news about Klarna’s focus on AI and what we’re doing in that space, and it’s really just focused on how we can radically transform both in driving efficiency, personalization, recommendations for our consumers and for our merchants. But what does this actually mean? So basically, we have this vision at Klarna of what Klarna can really do when it comes to AI. 

Imagine this world in which Klarna has an AI assistant that is doing all the work for you. We’re analyzing your spending patterns, we’re analyzing your budgeting, we’re analyzing your subscriptions, everything that’s going on, all while you’re asleep. When you wake up, we’re able to provide you with dynamic proactive recommendations on basically being a financial assistant for you. Where are you about to run out of a subscription that you need to reorder? Where are you over budget based on the financial planning that you’ve kind of put into your Klarna app? Where can you leverage some Klarna deals so you can spend more effectively? 

All of this will be available via the Klarna AI assistant, a great proactive way where you can just basically say, “Go, Klarna,” and it will handle everything for you. And that’s really the power of intelligent, like, real-time personalization that we’re working towards when it comes to AI. 

We’re really wanting to focus on being like an AI-powered financial assistant, not just a payment method, not just a shopping tool, but truly embedded and being able to provide that value to our shoppers where they can manage their money, spend more effectively, and save more. By combining Klarna’s deep understanding of our consumer base—because within the Klarna app we have a lot of data on our shoppers, what their preferences are, their wish lists—anything that they’re wanting to buy, we know about it. We’ll be able to leverage that, along with the cutting edge of AI, to truly build a financial support system, an assistant, that can really help them throughout the entire shopper journey. 

But that’s not just in the future; it’s actually a reality that we see today. We’ve built a truly consumer-centric shopping experience within our Klarna app. And here’s a few different examples of how we’ve done it. On the left-hand side, we have our search and discovery, which is basically an AI-powered assistant that can help you through looking through your recommendations on wish list items—can actually provide you with recommendations in a conversation format. You’re not just filtering and doing a full review of all the products available. It will dynamically provide a personalized update for you. 

In the middle, we have our personal finance assistant. This is all about managing your money more effectively. How you can save, how you can budget, how you can manage your payments, all within the Klarna app. And finally, we have our shopping assistant. This is allowing you to make sure that you’re spending your money effectively, getting the best budget options, saving money by utilizing Klarna deals; all of that will be available through nudges and prompts from the assistant. 

Obviously, this provides a ton of value from a consumer standpoint, but also from a merchant standpoint as well. What we’re doing here is really driving engagement, driving consumer loyalty, and pushing shoppers to potentially go to your site more organically and check out more often. And all this AI innovation is really focused on our bigger role of creating a more intelligent, efficient, and consumer-first ecosystem. But that’s not all. AI is just one piece of the puzzle for us. 

Our real mission here is to focus on smoothing commerce. What that really means for us is how we can be the best possible partner for partners like Stripe as well as for our underlying merchants that we work with. And that’s where Klarna Network really comes into play. It’s our answer to basically how Klarna can reposition ourselves as a payment network, where we are like others—like Visa, Mastercard today, but we take it a step further, where we’re able to drive efficiency and be much more consumer focused on how we can provide for them. 

And we think we’re well positioned to do that for a few reasons. First, we are a licensed bank, so we can cut out middlemen of other financial institutions, do our own issuing, and have direct relationships with the consumers. We also—which I’ll showcase in the next few slides, have a variety of ranges of ways you can pay. It’s not just traditional debit and credit, but we’ve listened to our consumers, and we know what they’re looking for when it comes to payment methods. And finally, as I mentioned, we are very focused on AI and driving a consumer-centric shopping experience for both our consumers, but then also for merchants as a whole. 

And through all of this, we really realized that while we started in being just a payment option at checkout, there’s so much more that Klarna can provide and benefit to consumers and brands by moving more upstream. We started with payments being online and in-store, partnering with strategic partners such as Stripe to expand the availability of Klarna. We then moved upstream into what we call conversion boosters, which is our way to increase the awareness of Klarna at checkout. 

Basically, we have our on-site messaging. That’s dynamic messaging that you can see on, let’s say, the product page that showcases that Klarna is available, how you can pay, and educates shoppers. We have Express checkout functionality, which is a great way to provide a one-click experience that allows our shoppers to really remove the friction of autofilling information for them. 

We took it one step further when it came to identification. As I mentioned before, we have a lot of information on our shoppers, and with their consent, we’re able to share that with our merchants so they can provide a much more personalized experience. That’s what our social log in—Sign in with Klarna offering does. 

And then we took it one step further, and we went all the way to the top of the funnel where we can actually drive inspiration and intent. And that’s through our Klarna app with affiliation, marketing, CRM campaigns. We’ve done so much to actually drive organic traffic to your ecosystem and to your sites. We are able to prompt and showcase the brands that we work with in our app, and it’s a great opportunity to really do a joint partnership. 

And while all of these as standalone products really provide a ton of value, what really is key here and part of the backbone of Klarna Network is that we built it in a way that is fully interoperable. And what I mean by that is that from a consumer standpoint, while these are all singular products, we want them to view it as one continuous session of checking out with Klarna. 

So if you started on the Klarna app and you were redirected organically to a merchant site, you leveraged our Express checkout functionality to pay over time with Klarna. From a consumer standpoint, that should all be one frictionless experience. We should remember them through the entire journey to reduce as much friction as possible. And so to do that, a lot under the hood had to change about how we operate to communicate across our products. But we’re very excited that this is functionality that exists today, both with our direct integrations and with Stripe. 

And to speak a little bit about our payment programs, you probably have heard of us when it comes to Pay in 4, but we also have our [“Pay in 30 days”] option, which is a try-before-you-buy. We have our Pay in 4 product, Pay in 3 in specific EU markets. This is our interest-free option where you can pay over a six-week period for interest-free installments. 

Our financing—this is for those higher-ticket items where we have an interest-bearing loan between six months to two years. And with this, we really are ensuring that we’re focusing on transparency in terms of the terms and conditions. And then, as I mentioned before, we have our Pay in full product, which is growing in popularity—not just as a fallback method, but also as a way that when, you know, the AOV is low, but you know that you trust that Klarna is a frictionless experience, you have that option available. 

But we also took it a step further. There are many other payment methods and ways that you can pay that are more tailored needs. The first of which is our debit risk program. This is our way to still be relevant when it comes to those higher risk verticals—thinking crypto, gambling, financial institutions payments. This is basically Pay Now, but Pay by bank. We also have a Pay in 60 option, which is our way to work with merchants that have longer lead times, so our potential drop shipment use case. 

And then finally, a very popular option is our 0% APR. So this is a great way for our strategic partners to leverage, if they’re trying to boost conversion, AOV, or focus in on a tailored specific item that they’re wanting to increase sales for; whatever the flexibility is, Klarna is able to work with those partners and provide this functionality. 

And so I talked a little bit about Klarna Network. This is obviously something we’ve been working on for the past close to two years, behind the scenes. But when we really started with this strategy, we were thinking how can we be the best possible partner to partners like Stripe, to end merchants that we work with. And we came up with six main principles, cornerstones, if you will, that will allow us, we believe, to be successful. 

First, it’s all focused on safe and secure shopping. We want to ensure that from a consumer standpoint, we’ve built that trust. We have our security protocols in place, but we also really dove into it from a fraud prevention standpoint. The more that Klarna is available, the more that we need to hold ourselves to higher standards. 

Global availability is extremely important. We want to be global by day one with all the partners that we work with. It allows us to basically just scale and provide that consistency of an experience. We never want consumers to say, “Why can’t I check out with Klarna in this market, on this brand, when I’m able to check out on this other market with them?” We want to make sure it’s frictionless for them. 

I spoke a little bit about this already, but products need interoperability to really drive that personalized experience for our shoppers. We honed in on how we can create a communication flow behind the scenes that makes it really streamlined. Integration simplicity is key. This is what I talked about earlier on how, with Stripe merchants, we’re now able to very quickly and easily get Klarna enabled. And that’s the point of all of this. We want to make Klarna a very flip-of-a-switch type functionality from a payment method standpoint. 

We’re always focused on performance. We want to ensure that we’re always iterating and making sure we’re the highest converting payment method that you have on your checkout. And then finally, we want to give our consumers the autonomy of choice when it comes to the payment programs available that they can check out with. 

So to do all this, we basically had to make a lot of changes to how we operate. The good news is all this has already happened. And with Stripe today, this is all available, and you don’t actually have to do anything to get access to all the bells and whistles that come with this new Klarna. But what we did have to change is, we had to basically reimagine, both from a technical and a commercial standpoint, how we work with our partners. 

I talked a little bit about it, but to be global by day one, as well as fully interoperable from a product standpoint, we had to change our payment product’s API. So basically, we’ve now reimagined what our APIs look like, and very much streamlined it to make it as simple to integrate Klarna as possible. 

Additionally, when it comes to managing merchants’ operational efficiencies, to be as efficient as possible, we had to fully revamp our management API. What that means is onboarding some merchants, offboarding, settlements, disputes; we want to ensure that we can communicate behind the scenes with partners like Stripe as quickly and effectively as possible, so that our joint merchants have a very consistent experience when they’re using Klarna as a payment method. 

Global agreement, pretty self-explanatory. Global by day one. And then, the other big change we made was our pricing. When it comes to moving towards this payment network model, we had to make some pretty big changes to our pricing model. One of which is to be less expensive. So from our buy rate standpoint, we had to really think about how we could be competitive across the board, across all verticals, all markets, and upstream and downstream on the funnel from SMB to enterprise. 

So to do that, we really had to reimagine our pricing structure so that we were never priced out as being too competitive in a market. And as I mentioned before, all of this is available today for our merchants, specifically with Stripe. There’s nothing that needs to be done. It’s basically just what we’ve been working on to make sure that we’ve optimized Klarna to its fullest potential. 

And one of the great ways that we can showcase, kind of, the success that we’ve seen with Klarna Network, specifically with Stripe, is through our conversion boosters. So what I’ll talk a little bit about here is our Express checkout, which is available through Stripe’s Express Checkout element. 

As you can see, kind of what’s going through the demo here, it’s our answer to the fact that shoppers want a frictionless, quick experience. If they have to enter their information over and over again, they’re more likely to abandon cart. And we see around 22% overall cart abandonments are typically due to the length of the process to check out. 

So, our Express checkout functionality is our answer to that. It’s a way in which we are able to, with already authenticated Klarna shoppers, provide a one-click experience. It can be added on the cart page, product page, or any step of the funnel; they’re able to click it and go through the flow. We see it drives 7x in terms of overall faster checkout experience, and we’ve seen tremendous success when it comes to our Stripe partners that have leveraged this through the Express Checkout Element today. 

One example is with refurbed, which is an [electronics] marketplace that works with over 4 million consumers to date. Klarna has had tremendous success with refurbed over the year and was doing really well, and going into the Cyber Monday/Black Friday sales, they were wanting to see how we could really drive conversion and really optimize the overall experience. 

So jointly, we pitched the fact that we thought Express checkout would be a great opportunity for them and very, very quickly they were able to get it enabled ahead of the sale, and the results really spoke for themselves. We were able to drive a 3% increase in overall uplift and conversion, and now over 30% of all Klarna volume is being processed through the Express checkout. 

And this just shows that with Klarna’s product speed and interoperability, as well as the ease to integrate via Stripe, we’re really truly able to meet the needs of the brands that we work with with Stripe today. 

And the last thing to talk about today is obviously our exciting announcement of Klarna being embedded in Link. So we’ve taken it one step further by obviously focusing on our Klarna Network strategy, but Stripe actually came to us and challenged us with this opportunity that we had not done before. When you think of Klarna, you think of the Klarna brand, the pink logos, and we try to provide a very consistent experience when you’re checking out with us. But with the Link opportunity, the idea was that Klarna would be embedded as a payment method, where you wouldn’t be redirected to Klarna at any point. 

This required a lot of work for Klarna, from a technical standpoint, to fully be an embedded payment method. But we knew that doing this with Stripe was the best opportunity so that we could drive an increase in conversion and customer adoption for all of our joint brands. 

So how does this look like? As mentioned, this will be something that’s formally launched later this summer, but the idea behind this is that basically it starts with discovery. 

When you’re going through the flow on a Link checkout, or the Link wallet, you’ll be able to discover Klarna as now the pay-later option. Behind the scenes, there’s a lot of autofill happening between Klarna’s—if you’re a returning user for Klarna, if you’re a returning user for Link, we’re communicating behind the scenes to ensure that you’re not having to authenticate twice, you’re not having to be redirected; everything is very seamless from that consumer standpoint. 

If you’re a first-time Klarna plus Link consumer, you’ll have the opportunity to select your payment method. Once that payment method—Pay in 4 financing, whatever you choose—is on file, the real magic happens for that repeat purchase. So that’s where it’s a true one-click experience. 

So to take a look at how the demo goes, you now can see Klarna would pay later. We’re able to prefill and autofill the whole enrollment process with Klarna today. Here you’ll be able to see the payment plans available, select which one you want, continue, and now basically you pay and you’re good to go. As you can see, there’s no Klarna pink—I mean, except for the logo—but there’s no redirecting to Klarna at any point. You’re able—fully stay embedded in the Link experience. 

And we believe and have seen the value that this will drive higher conversion for our joint shoppers. 

And again, the true magic really happens in that returning user experience. So here, you clicked “Pay later,” you see that “Klarna, pay over time” is already selected, and now you’re done. So that is where you can leverage Klarna in as quick of a way as you could do with an Express checkout or something like that. And this just extends the availability of Klarna and the ways in which you can offer Klarna as a payment method. So, we’re very excited about this partnership. 

From a merchant and consumer standpoint, there’s obviously a lot of benefits to this as well. The great news is, it doesn’t require any integration to actually get Klarna enabled. Klarna will just be available, out of the box, for all Link-integrated merchants. It will drive higher conversion. As we showcased, offering a pay later option can truly provide that value to your shoppers. We’re going to continue to boost awareness of this partnership over the next couple of months to drive a really organic growth for Link and for the pay later experience. 

And we’re really focused on, obviously, with all of the information sharing behind the scenes, making sure that we hold ourselves to the regulatory requirements and building that trust with our consumers and our merchants. And then on the consumer side, it’s a pretty easy experience of why there’s benefits here. We’re providing more ways to pay. It’s very flexible. It’s a faster checkout experience. And we’re basically taking the trust that you have with Klarna today and the trust that you have with Link, and just mirroring that into a stronger partnership. And as you saw, there’s no redirects, there’s no friction in the flow. 

So the exciting news is this feature is now available. If you’re wanting to get early access, we have this scan QR code that you can scan. We also have it on the Stripe documentation as well as Klarna documentation if you want to be part of the journey with us here. 

So to just kind of wrap up, the Klarna Network is not just a payment method. We are a truly growth platform, and we’re really focusing in on how we can drive that conversion, reach, and value for our shoppers. Through the Express checkout functionality, through an embedded experience with Link, and all the other different players in between, the real value that we’re focusing on is how we can drive value for you all through every customer interaction and every transaction. 

So we’re very excited about all that we’re working on. Have a great rest of the day. Thanks, y’all.