Michael Moritz on Klarna's $155M Round

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24 points·FluidDjango··5 comments

The whole concept reminds me a bit of the "bagel guy" in Freakonomics. If I remember correctly, he had an ~85% payment rate when it was strictly on the honour system.

I'd be curious to know their payment rate. On one hand you'd expect it to go up since they actually have the name and e-mail address of the buyer (the bagel guy had nothing). But on the other hand, the whole impersonal nature of the internet might increase fraud. Could go either way.

(for those who haven't read Freakonomics, the "bagel" guy would drop off a box of bagels in an office and pick up the remaining bagels and the proceeds at the end of the day)

I implemented Klarna as a payment option in one e-shop recently. Said e-shop operates in Denmark, Sweden and (as of this week) Norway, but the Klarna option is only available in Sweden. The owner said that without this option it wasn't worth even opening the Swedish version.

Klarna also requires your Social Security Number, in those countries which use it, as well as other information: http://integration.klarna.com/en/testing/test-persons .

Not being in Europe and not wanting to buy something; anyone with experience with the service want to explain how it works in detail? Their website is somewhat vague on the process.

How do they enforce payment? What's the penalty for not paying?

I've used Klarna once or twice when shopping online. The basic concept doesn't require a lot of details, I should think: You buy something, Klarna sends you an invoice, you pay it just like any other invoice.

I assume failure to pay is handled just like all other consumer debts. First they send you a couple of reminders, then they sell the debt to a debt collection agency.

They use a lot of Erlang at Klarna. I think one of the "original Erlang guys" from Ericsson works there.

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