A nearly ten-year old acquisition may turn out to be Klarna’s secret weapon to improve security during the checkout process.

The Swedish payments company announced this week that it has integrated a new payment service into its Klarna Pay Now product suite. The integration is designed to improve checkout security and has been made possible thanks in large part to Klarna’s acquisition of Germany-based Sofort in 2014.

“We are integrating Sofortüberweisung into the Klarna environment to offer consumers and merchants the best of both worlds: the familiar Sofort payment process combined with the smoother, more secure payment experience and global reach of Klarna,” Klarna Chief Commercial Officer David Sykes said. “The combined product is better for merchants and consumers, and (is) also a platform for Klarna to expand the functionality of Sofortüberweisung globally.”

Sofortüberweisung is a bank-to-bank payment service that Klarna gained access to by acquiring Sofort GmbH in 2014. Klarna has been incorporating Sofort’s technology into its solutions since 2017, and has launched the service in some of its other markets around the world, including the U.K. With this week’s integration, consumers will be able to track their Sofortüberweisung payments from within the Klarna app, as well as make payments without having to re-enter their payment information. This, combined with Klarna’s two-factor authentication, facilitates both greater convenience and increased security.

To that point, customers will need a Klarna account in order to take advantage of the Sofortüberweisung integration, and the company notes 95% of Sofort customers already have one. Klarna also reports that the “improved user-friendliness” of the integration has produced a 5% increase in conversion rates for consumers who use it.

Founded in 2005, Klarna made its Finovate debut at FinovateSpring 2012. In the decade-plus since then, the company has grown into a major e-commerce and payments business with 150 million total active customers in its network – including 34 million in the U.S. With more than 500,000 total merchants using its technology, Klarna facilitates two million transactions per day.

The company also recently made headlines with word that it is preparing for an initial public offering in the U.S. as early as the first half of 2025. Also this month, Klarna announced that it had partnered with Adobe Commerce to make it easier for merchants on the platform to implement Klarna’s Buy Now Pay Later (BNPL) services.

“Consumers are embracing the flexibility that Buy Now Pay Later services can provide, with Adobe Analytics data showing over 11 percent growth this year,” Jason Knell, Adobe Sr. Director, Content & Commerce Partners, said. “Klarna’s global footprint enables Adobe Commerce merchants to meet the changing needs of their customers and stay competitive in today’s digital economy.”

Klarna is headquartered in Stockholm, Sweden. Sebastian Siemiakowski is Klarna’s CEO.

Photo by Karolina Kaboompics

• Klarna launched Klarna Plus, a subscription tool that offers users premium benefits and access to exclusive offers.
• For $7.99, users receive extra rewards points, a waived service fee for purchases made at retailers that are not in the fintech’s network, and exclusive discounts at retailers.
• Klarna counts 150 million active users who make two million transactions every day using its platform.

The subscription economy has been gaining steam since Netflix was founded in 1997. With news this week that buy now, pay later (BNPL) player Klarna is jumping on board, it is apparent the subscription trend is not dying out any time soon.

Yesterday, the fintech unveiled Klarna Plus, the company’s subscription service for its U.S. users. For $7.99 per month, users receive premium benefits that offer Klarna shoppers access to a variety of offers and deals.

“Today marks an exciting milestone for Klarna with the introduction of our first-ever premium subscription service, Klarna Plus,” said Klarna Chief Marketing Officer David Sandstrom. “Our research indicates that dedicated Klarna users are looking for an enhanced shopping experience through a subscription model. Klarna Plus addresses this demand, allowing us to deepen our engagement with 37 million loyal U.S. consumers, while also further diversifying a portfolio of payment and shopping solutions.”

What do users receive for $7.99?

• Rewards points
  Users accrue two rewards points for every $1 spent on purchases with Klarna Rewards Club. This is double the 1 point for every $1 spent that rewards club members traditionally receive.
• Waived service fees
  The service fees that users incur at retailers outside of Klarna’s network are waived when they pay using their Klarna One Time Card.
• Exclusive deals
  Users gain access to special discounts at retailers including Nike COACH, Macy’s, Instacart, and GOAT.
• Sign-up offer
  Users receive $8 off their first Klarna Plus purchase.

Like all subscriptions, this one is only worth the price tag if the user actually uses the service. Here’s a breakdown of each incentive:

• Rewards points
  The rewards points are valued at $0.02, and they can only be exchanged for gift cards at a limited number of brands, including Starbucks, Sephora, Foot Locker, and Uber. Receiving an extra point per dollar under Klarna Plus would require spending around $400 each month to make up for the $7.99 monthly fee.
• Waived service fee
  As far as having the service fee waived, Klarna users face a $1 to $2 transaction fee when they make purchases outside of Klarna’s retailer network. This means users would need to transact at these outside retailers anywhere from four to seven times each month to make the monthly fee worth the cost.
• Exclusive deals
  It is difficult to place a dollar number on the value of exclusive deals, since people have varying relationships with high-profile brands such as Nike and COACH. That said, this benefit may be the most effective in attracting users. Loyalty program members will receive monthly deals valued at $6 at five selected stores for a maximum benefit of $30 per month.
• Sign-up offer
  For users who are not brand-forward, the more thrifty shoppers may be drawn in by Klarna’s $8 coupon. It is essentially allowing them to trial their first month for free.

Klarna has built up its shopping marketplace to compete with that of Amazon. The company works with more than half a million retail partners who list goods across a range of categories, including health, clothing, toys, beauty, photography, and more. Klarna counts 150 million shoppers– 40 million of which are U.S. based– who make two million transactions using its platform each day.

Klarna was founded in 2005 and has been transforming itself from strictly a BNPL company into a shopping ecosystem with goods from more than 500,000 retailers across the globe. Last year, the Sweden-based company extended its partnership with Adyen, announcing that it will leverage Adyen’s acquiring capabilities to power card payments for its end users.

Photo by Artem Beliaikin on Unsplash

• Adyen and Klarna are extending their partnership, with Adyen agreeing to serve as the acquiring bank for Klarna.
• The two fintechs first partnered ten years ago, when Adyen started offering Klarna’s buy now, pay later technology to its customers.
• Klarna has evolved from BNPL into a shopping marketplace and currently hosts 500,000 merchants on its platform marketing to 150 million shoppers who transact two million times each day.

Netherlands-based fintech platform Adyen and Sweden-based ecommerce solutions provider and shopping platform Klarna are doubling down on their partnership. The two announced this week that Klarna will leverage Adyen’s acquiring capabilities to power card payments for its 150 million consumers and 500,000 retail partners across the globe.

The fintechs’ initial partnership dates back ten years, when Adyen began offering Klarna’s buy now, pay later (BNPL) technology to its customers. The new acquiring bank agreement will begin in Europe, North America, and Asia in 2024.

“Klarna has, in many ways, revolutionized the digital shopping experience,” said Adyen Co-founder and Co-CEO Pieter van der Does. “I am proud to say we are now joining forces in a partnership set out to simplify payments and shopping in our respective areas of expertise. Adyen’s financial technology platform combined with Klarna’s various consumer offerings will raise the standard of payments and consumer experiences worldwide.”

Adyen was founded in 2006 and offers payment acceptance, embedded payments, virtual card capabilities, authentication, risk management, insights, and more. Among the company’s corporate clients are Meta, Uber, H&M, eBay, and Microsoft.

“Adyen, a world-class financial technology platform for businesses with global ambitions, aligns seamlessly with Klarna’s role as the preferred payments network and shopping assistant for consumers and retailers worldwide,” said Klarna Co-founder and CEO Sebastian Siematkowski. “In our journey towards strengthening our global commerce offerings, Adyen will play an integral role as our trusted partner.”

Originally launched as a BNPL technology provider, Klarna has evolved into a shopping marketplace similar to Amazon or Walmart. The company works with more than half a million retail partners who list goods across a range of categories. Klarna counts 150 million shoppers– 40 million of which are U.S. based– who make two million transactions on its platform each day.

Earlier this year, Klarna teamed up with Open AI to leverage ChatGPT to help enhance the shopping experience to power a product recommendation engine. Klarna was founded in 2005 and is now live in 45 countries.