Klarna launches in US
klarna.com
klarna.com
When you order a product online, you will not pay by credit card. Instead, you will receive an invoice with the product - so you don't pay until you have it. Furthermore, they'll give you 30 day credit, and can even split the payment over several months (3, 6, 12, 24 or 36) for an extra fee.
It's pretty easy to pay by installments. You get the invoice with the full amount to pay. If you then pay a lower amount (e.g. full_amount/12 to pay over 12 months), you will automatically be transferred to the split plan, and get a new invoice every month for 10 months.
I think it's very used in Sweden, where they've had an habit of paying via invoice instead of credit/debit card for years.
Klarna tried a few years ago to enter the market here in Denmark, but I don't think it has been a huge success. People in Denmark are more used to just pay with credit card, and I think that's the same problem Klarna will face in the US.
How is this different and better for me than a credit card? Using a credit card I don't have to pay until the end of the credit cycle, which usually is after I receive the product, and pay over a longer term for the 'extra fee' of interest. The credit card company also reverses charges for items I don't receive, protects me from fraud (over $50), and provides a host of other services such as frequent flier miles, insurance, etc.
Also, what are their interest rates?
Klarna let you choose between invoice and credit card in their checkout (which is embedded in the retailer website, similar to other payment solutions).
Although they started out with invoices, I think they are better described as a payments platform these days.
> what are their interest rates?
According to this document[1] on Germany, 10% - 15%. I found it through a Google search, don't know if it holds for the US.
[1] https://cdn.klarna.com/1.0/shared/content/legal/terms/2/en_d...
You click "buy" and then you are done. Off course, later you will have to do all the boring stuff...
You may be right that U.S. customers won't prefer paying by invoice en masse -- and Klarna checkout offer that too.
Some consumers prefer immediate [debit card] to deferred payments [invoice or credit card], others want it the other way around.
Internet retailers can use Klarna's payments platform to enable both immediate and deferred payments.
I've been living in Norway since 1986 and have never heard of them.
Although paying by invoice is quite common for services (builders, car mechanics, etc.) it is less so for goods unless you are a company. Invoices and direct bank transfer used to be the usual way for pretty much everything but is, I think, becoming less common all the time except for high value goods like cars where most people's credit cards would not have a high enough limit.
Payment by invoice means that when you order a product online, you simply receive an invoice along with the product when it arrives, and you're trusted to pay for the item on the invoice within the next few days or weeks by way of a direct bank transfer.
I found the process quite foreign to me, but the availability of fast and cheap credit checks made this possible. Companies like Klarna maintain and/or license a database of people in the country who have a history of failing to pay their invoices, and they are denied when they order products from other websites in the future.
What I'm wondering here is, how are they going to pull this off in the US? There are credit checks, but they really only apply to whether you've made loan payments or declared bankruptcy recently, and wouldn't reflect if a company has a claim against you.
What they do really quick is a credit check, based on what they know. They may also use third party suppliers the first time (or more?) if they do not have enough data.
I am not actually sure if they "buy" the invoices, but they collect a fee for reminders and handling if the payment is late.
All I really know is that they are all over the place if you go online shopping here in Sweden, they probably handles payments for a majority of online shops here, or a very large chunk of it at least.
Klarna has a significant presence with both Erlang and Java.
If so (and even if not, to be honest), I do find it interesting how often something pops up that seems to be a return to older ways of doing things. In this case, I'm reminded of how things worked in my early childhood (1980s, UK) - our local butcher, petrol station and others would all keep an account, which my parents would pay off when invoiced. In the context of the last 15-20 years, though, that appears old-fashioned to the extreme - yet here we are reinventing new ways of doing things the old ways.
Second, it makes dealing with payment a _lot_ easier for any internet business. You know the headlines from hacking where a lot of credit card numbers are stolen. Using Klarna, the internet company does not have to handle credit numbers by offloading that whole thing to a trusted third party.
An online store using Klarna is really a stamp of quality on that business.
Disclosure: I'm writing this from Sweden where Klarna is based, but I am not affiliated with the company. I did some research into online payment for a customer (a municipality) a while ago and came across Klarna.
Naturally there are related problems that one has to solve, but the major one (unintentionally extending credit to someone you shouldn't have) is, I think, a lot less of an issue than commerce at large instinctively thinks.