Klarna changes its AI tune and again recruits humans for customer service
customerexperiencedive.com
customerexperiencedive.com
I did what seemingly no other publication reporting on it did: signed up for Klarna, bought one item and used this bot.
I was... not impressed?
Klarna's "AI bot" felt like the "L1 support flow" that every other company already has in-place: without AI! Think like when you have a problem with your UberEats order and 80% of cases are resolved without a human interaction (e.g. when an item is missing for your item.)
I walked through the bot's capabilities [1] and my conclusion was that pretty much every other company did this before (automating the obvious support cases.) The real question should have been: why did Klarna not do it before? And when it did, why did it build a wonky AI bot, instead of more intuitive workflows than other companies did?
My sense is that Klarna really wants to be seen as an "AI-first tech company" when it goes public, and not a "buy now pay later loan company" because AI companies have higher valuations even with the same revenue. But at its core, Klarna is a finance or ecommerce-related company: an not much to do with AI (even if it uses AI tools to make its business more efficient - regardless of whether it could use non-AI tools to get the same thing done)
The AI marketing is just an attempt to reframe the value narrative of the company before IPO. They would rather be seen as an AI company than an unsecured lender of last resort.
The narrative on Klarna’s core business is not good in any case, either an extractive lender benefiting from people buying what they may not afford and charging exorbitant interest or a lender of last resort who has not properly underwritten the risk in their portfolio. Neither is preferential to them compared to a value narrative framing them as an AI company. Likely the market is too skeptical in this environment to take the bait however.
I thought they more or less instantly offloaded the risk as asset backed securities to clueless people who didn't know the actual risk profile what they were buying
sound familiar?
Similarly, Klarna isn't a shady payday loan company, it's an "AI-first consumer finance play".
In a more civilized time, saying this was your plan would get you chucked feet-first into a wood chipper.
We just used to call them loan sharks
I think there is a feeling that klarna, and other bnpl companies just lend without checking or caring of consumer credit, or buying power. I've never used them before, so I don't know if this is a case.
With credit cards there is the "appearance" of them checking credit scores, ability to pay , etc.. before giving a credit card.
I say appearance, because as we all know cc companies will just lend cards to anyone, and then charge huge interest rates.
Ultimately it's another form of credit, and it's a minor change on the current system. But since it's finance and lending, it's a step to make lending easier.
Shopkeepers don't want it, but fear they must if big chains start offering it, just as online shops feel like offering it is unavoidable due to the popularity in certain demographics. The financial watchdog doesn't like Klarna, and is increasing scrutiny³.
If Klarna has trouble marketing their value, then that at least is good news, but not unsurprising given the spate of attention it received over the last two years.
1: So much for the ethical side of Adyen (e.g., https://www.adyen.com/impact sounds hollow when you partner with loan sharks).
2: Some people are quick to defend Klarna for offering people a chance to buy their necessities with what amounts to a payday loan, but that is bullshit. Klarna predominantly is not used for daily necessities.
3: Klarna now has to state that they are offering a loan in the Netherlands where they are available as payment option, with the mandatory "borrowing money costs money" tag-line.
But there is also the realisation that a customer who uses BNPL today, won't be coming back next month when they are paying off their loan.
Dutch shopkeepers do not want Klarna, but if major chains like Primark etc. do it, they fear customers will start expecting it.
I don’t think that’s a good argument. For shops and customers that utilize BNPL you are not typically making routine purchases at the shop anyway because the minimums are $50 or more (merchants can negotiate those terms with the provider) but the base tends to be around $50.
If you buy a bicycle using BNPL you’re not like coming back to the shop the next month and buying a new bike again.
BNPL increases sales and merchants really like using it which is why they are signing up for it more and more. Basically the increase in cost is worth it to increase sales.
There may be some bad social dynamics, taking out loans, etc. but generally both merchants and customers like using those products which is why they use them.
My intuition is it brings in a slight bump now, at the cost of longer term.
The customer can either wait N months to buy the bike cash, or buy it now and pay interest for the next K months.
- In the first scenario, customers can quickly save up and return for accessories/etc.
- in the latter, the customer is playing XX% on top of the bike purchase which ultimately reduces the purchases that customer can make.
It’s just exploiting the “present bias”/time-discounting in human psychology.
Same way credit card increase sales, such that stores are willing to eat the higher interchange rate it costs compared debit.
Instead merchants prefer to lock in a sale right then and there, and they pay for that service.
Perhaps for an individual shop right now, in a world where Klarna exists but not universally, yes, there's a benefit to using it to lock in that particular customer right now.
It's less obvious to me, in the long run, that widespread Klarnification results in benefits to any particular shop. As mentioned earlier, having Klarna sapping up to double-digit percentages of the portion of customers' money (it's "zero interest" until it very much isn't, and they're in the "subprime" market) they were spending on possible-Klarnables and a few percent of yours on top as fees is easily a bigger impact that the average losses, if any, from the delta between switch-away and -to.
It's a bit of a prisoners' dilemma: you stand to gain money by defecting (to using Klarna) unilaterally, but if everyone does that, you all, plus the customer, collectively lose money (to Klarna).
Maybe? I’m not aware yet of any data that would support that hypothesis one way or the other. But we know that some businesses fail and some succeed so it would lead me to believe that hypothesis probably isn’t correct. As you mention though the availability of these offers isn’t universal, some businesses eschew these options and others don’t, and we will see that play out in the market.
If the businesses that don’t offer these services (cash only businesses as an analog) fail or convert you might have your answer.
I will also say that for many businesses they offer more than one BNPL provider at checkout so there is competitive pressure to offer good terms, have good creditworthiness models, and features to attract customers. Platforms like Shopify allow BNPL providers to create easy to use plugins that appear at checkout and merchants can add a few including Shopify’s home grown solution rather trivially.
In general I think your argument that it’s less obvious that it’s beneficial “in the long run” rests on the same logic that credit cards, 0% for 12 month offers, personal loans, etc. do as to whether there are benefits. Right now businesses add these products and see revenue go up, even if margins go down by 6-8% or so.
Loans like this also encourage customers to increase spend, because adding an extra few dollars (cents, etc) to your monthly payment is psychologically not as big of a deal as waiting another month or two before you can afford the more expensive item.
Putting a new group of people into predatory debt is a nice way to juice your numbers before you dump your shares, but it's not a good way to sustain an economy focused on producing real value.
The local independent Chinese place delivers and the local pizza places also deliver. (Pizza Hut’s own delivery is significantly cheaper than ordering it via Uber Eats.) Ergo, restaurants don’t have to deal with the rent seeking that siphons off profits, and money stays more local.
In a city an hour away, a local guy came up with his own food delivery service and eventually paid a programmer to make a simple app. You can now order from a whole bunch of places cheap. It’s amazing he’s stayed in business, but one thing he doesn’t do is rip off restaurants.
This is generally called "being a person with a soul."
>This is generally called "being a person with a soul."
Wholesome. So the hole in the wall restaurant that only takes cash was actually trying to save its customers from a lifetime of credit card debt, rather than saving the 3% interchange fee and possibly tax evade?
I don't know if they're engaged in tax fraud though. Not really my department.
I believe in business done for mutual gain, that's how I do mine, and I make it a point to find as many like-minded people to do business with because they're just easier to deal with. I don't feel the need to get second quotes on car repairs because I've gone to the same shop my dad went to. I know the guy, I handle his IT needs. He isn't out to get me for every dime he can, and I'm not out for every dime either: we go to each other when we have problems, and we solve those problems for one another with some on the top to take home.
I'm sure neither of us will be billionaires but I can also sleep at night which is nice.
> The pilot has started small, with two of the new breed of customer-service agents live now, but the ambition is to tap into candidates such as students or rural populations. “We also know there are tons of Klarna users that are very passionate about our company and would enjoy working for us,” he added.
[from the bloomberg article: https://www.bloomberg.com/news/articles/2025-05-08/klarna-tu...]
https://web.archive.org/web/20250512120733/https://www.bloom...
But as you say that was ZIRP when everybody was stupid and this is now.
Evaluating the effectiveness of the AI bot is another matter and firmly in the investigative journalism sphere. Coincidentally that is an awesome application of a blog.
Shots are absolutely necessary when its warranted. Full. Stop.
Previous discussion: https://news.ycombinator.com/item?id=42432494
Mainstream media will print a press release for you if you send it to them. It is very important to understand how limited the fact checking really is. If a mainstream paper prints a statement of the form "X said Y", you can be sure that:
- they are pretty good at checking that person X did actually say Y
- they make no effort whatsoever to fact check the underlying statement Y.
There isn't really the money or interest in actually investigating the claims of every little press release.
> really wants to be seen as an "AI-first tech company" when it goes public, and not a "buy now pay later loan company" because AI companies have higher valuations even with the same revenue
Yes. This is because multibillion dollar investments are made by people who are easily distracted by the jangling keys of AI.
I had to go through both reasonable and weird steps, including IQ tests for some reason. I passed them all, and then I was ghosted, and upon reaching out I was met with months of excuses asking me to wait (the recruiter is on vacation, we’re waiting for the new budget to be approved, “I personally forgot to reply”, and a few others). I eventually stopped reaching out and never heard back.
If the whole company is as dysfunctional as those interactions implied, I wouldn’t really look up to them as trendsetters.
Klarna is the prime example of toxic public companies
The problem is that vendors are telling companies they can eliminate 80-90% (maybe even 100% if they can keep a straight face) of their customer service agent jobs with AI, and that is nonsense.
Not sure if this is the primary reason. It just seems to me their AI adoption was unable to meet the baseline effectiveness of their human agents.
Local firms here have had bots in customer service for many years now, even well before the transformers era. Is Klarna living in a bubble?
They don't understand the problem, and when I point that out by explaining my issue another way they just answer "Have I solved your issue?". Well, no, you didn't; you didn't even understand the problem.
The worst part is that they are pretending they are humans.
This is a real thing. I had similar experience with Discord support. They closed me ticket or sent me to weird chases(restart app, reinstall app, format your phone!, upgrade to latest os version, try a different phone!, update your appstore!, change mobile operator etc). It was insane and in the end, I said I don’t care and will uninstall discord. Then I get a small reply to the ticket, did we solve your problem? If so, we can close this ticket.
And no, I was not doing vague descriptions, I literally sent screen recordings of exact steps to reproduce the issue.
Even humans cannot handle all requests because some don't make sense or are unrealistic. But at least a human can make that judgement and be held accountable for their decisions. I'm baffled when companies makes such drastic decisions, I'm pretty sure if they had asked (they probably did and ignored them) their AI team, they would have advised against firing their agents.
I have an extensive experience with dealing with Chatbots and hang out in places where people tell everyone AI will not take job while knowing fully well it might alteast take away the job of starbucks drinker sitting next to your cubicle.
Here is the truth, a single AI implementation won't replace a 15 person support team out in Philippines/India, AI won't replace a 8 person team in Michigan, but.... You pick 3 people and tell them to use AI to automate their jobs.... Now that is how you get AI to do stuff.
AI is a helper. Period. Do not let anyone else tell you otherwise. I have dealt with enough support teams to know an AI can surely do a better job than $3 dollar an hour fixed contract 8 hour shift offshore support hand telling me let me escalate your question to our north american team who will be back on monday as my reponse to "Hi" and no that is not a chatbot response.
You get three decently smart guys, and you hint at them use AI to automate your job. You pay these guys the salary of 5 US support desk salary which is equal to 10 offshore support desk salary. Then you can implement AI. You need a human to AI to work. You need a guy to snooze at the steering wheel so when a guy wearing all black jumps in front of your car in the dark road who can atleast come out and call 911. Does not even need to be a smart person. Just someone capable of calling 91. Hear that Uber? What your mckinsey consultant friend from the same frat or you ex-sister in law did not tell you that to you?
AI is not going to do well in full autopilot but that does not mean it is bad. You need someone with reasonable cognition ans allow them to be in full sync. That is the future and complaining about AI won't help you keep a job or cut costs for your business.
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Now to follow up. When you have established a reasonable framework of AI driven "task execution", you keep doing incremental layoffs. As usual you want your employees to near-burnout. See where that puts you in the next few years
Without some drastic breakthrough in LLMs, I believe "AI is not going to do well in full autopilot" will remain true for the next 5-10 years. Reaching full autonomy is a definite. The question is how long it takes and what innovations have yet to be made needed to achieve the first effective implementation that is able to spread widely.
Unfortunately, I think military applications will push AI the fastest towards truly effective autonomy.
It’s almost like this time last year they were doing everything they could to lower cost in advance of a now delayed IPO. And now they have to make sure they don’t implode before said IPO.
I wonder what happens with the remaining third.
There is NOTHING special about current technology in application of capitalism. Its always been exploitive, and grinds people into used and nearly dead objects.
The answer isn't reforming capitalism, either. FDR tried, and we're back to the Black Friday set of events... But in this case, we're even worse off with alienation of basically every country as some sort of oneupmanship.
Were there any major updates to the agenda, since it was tried the last time?
If not, why expect a different outcome next time?
What they're doing in tech innovation is astonishing. And you can look at even just something like high speed rail, and its amazing. They're also connecting western Europe as well to the rail system. Look up Belt and Road initiative.
They're also on the forefront in green/clean tech. And thorium reactors. Oh, and fusion.
I'd say their 'try' is doing damned well. Its certainly blowing the USA out of the water. Well, unless you count number of homeless. We're beating them handedly there.
I rather meant the more traditional approaches, like the one I was born into that fell apart. China as of now is rather state capitalism to me.
And yes, they are quite effective in some areas. Totalitarism can be. Doesn't mean I would like to copy them.
Is socialism incompatible with capitalism or is it incompatible with democracy? Because if the successes of China can be attributed to capitalism while discounting socialism/communism, then why are we even talking about socialism in the first place, if it’s totalitarianism which is the problem?
Somehow, if China stopped being totalitarian tomorrow, but remained socialist, whatever that might mean to you or look like, if they kept doing the same things in the market and in the party, the US would probably still treat China like we do Mexico now, and I doubt anything would change in how US treats China.
Maybe I just lack faith in most folks in US. Since the “end” of the Cold War, there’s been a kind of search for economic, political, and cultural scapegoats. The potential end of demonizing China if it ever even happened for good cause would probably just cause transference of that moral outrage and social opprobrium to the next consent-decreed valid target for market-validated hate, which in this case would probably be Russia. The problem is that Russia doesn’t have much global economic impact on their own so US has to find a new big bad if China doesn’t fulfill that role anymore.
Well, it started of as authorian socialism and now is just authorian party state oligarchy with lots of red flags.
And I have no connection to US demonisation policies (and this article was about a european country). My background is, that the alternative left in europe(where I socialiced) - rather traditionally does a glorification of China. So I am aware of all their glory.
I just happen to value free thinking and free speech. And this is not possible there. And that is no propaganda, but official chinese policy.
So I don't know about "true socialism" but I do know that all the marxists experiments ended up in authorian dictatorship, which is why I am more than sceptical to base new experiments on Marx again.
I think federalism in the US allows a kind of “freedom gradient” where the patchwork of overlapping legalities allows for uneven enforcement and a distribution of norms of business and in behavior. These gaps allow for growth and innovation but can lead to voter approved market failures in one jurisdiction that might as well be a world away from those who work in the state capitols or in D.C.
I don’t know why socialism, Marxism, or whatever is blamed for dictators doing bad things for good/bad/no reason. I don’t blame democracy for the bad policies of its adherents either. Any system of government can produce bad results.
Maybe because the base of the theory comes with violence included? The need to take something of other people away(means of production) and maintain that order against expected resistance of the current owners?
It is really not surprising to me, that all experiments ended with totalitarism, because how else to do it like this?
(I am pretty sure there was some exchange between Marx and Engels I read, that already discussed the need to have camps where all the capitalists would have to be imprissoned)
Also there is the concept of global domination. As far as I understood it - Marxism needs to rule globally to really work. No other model allowed. But in reality there are indefinite more possibilities between socialism and capitalism. But then again, I did not read much Marx. What I read confirmed what the (stalinists influenced) socialist priests told me before. And they definitely had the world revolution concept ingrained. But I also met and debated with lots of other alternative folks and the totalitarian concept seems universal with marxists.
Anarchistic socialism is a bit of a different story, but in my eyes the same principle, just more local.
If everyone in China could vote, and they voted along party lines as they do now, the system would be democratic in nature, and yet, nothing would change immediately as far as the US-China relation because the issue is multidimensional. Compromise between nations is a kind of diplomatic solution that is not available to individuals with respect to their government. It would be great for many people if China were democratic. Would it be better for all? Would it be better for the US? I’m not sure, but probably. But that’s not a mandate to subvert sovereignty, it’s a matter of trade offs. No one cares if Vietnam is socialist now, and they barely care that Cuba is. These things matter geopolitically, but they don’t matter to the average person.
Yeah, but the average person apparently rather wants to live in a democracy than in a pseudodemocratic socialist state.
I was too young to remember much of day to day life - but I do remember vividly the joy of the people after socialism was over.
That's the sense in which I mean it doesn't matter. The certainty of labor under a system of control operated for profit is another sort of pseudo-democratic state we find ourselves in, and I hope I'm not too old to see the day that the last person works the last shift of wage labor, as that will be another sort of cause for celebration.
Oh, I agree to that, that is why I would not like to repeat the misstakes of the past on the pursuit to get there.
So in the now I prefer to have the freedom to really choose my jobs or also choose to go away or choose to freelance. All not really possible before.
Arguably, China stands to benefit more from recent advances like AI than the US, because China already had cheap solutions better than AI for manufacturing, human workers. Now knowledge workers have an efficiency boost by working with AI, which may help keep wages from rising too fast for those whose jobs aren't impacted by AI yet, but they're going to go up.
Yeah. They have cheap workers.
But wasn't the whole point of socialism and the workers movement to not have cheap wage slaves anymore? But to value humans?
"capitalism is really just goods and services and salespeople and ads. "
And you don't think this is kind of an useless oversimplification?
The point of free market systems is, that there is no central authority doing all the planning.
So when you want that central authority, it is authorian by design.
Now you can argue that there is indeed a lot of planning and regulation in our free market capitalism. And that the "blood" of free markets, money creation isn't free either. And that some people have so much money in effect controlling the regulators etc.
But would you actually rather live in china?
I don't know if socialism has a point as such. Value and dignity of humans is one goal, but the means by which that is accomplished is the distinguishing characteristic of socialism to my reading; that is, the means of production is not privately owned. What precludes inherently valuing humans under such a system?
https://en.wikipedia.org/wiki/Socialism
The US has prevented other projects which could have overcome perceived weaknesses in socialism and capitalism by fusing aspects of them both.
"I don't know if socialism has a point as such. "
And since many different people used the word for very different things .. definitions are not clear. But people can be treated as slaves whether the factory is owned by a multinational cooperation, as well as a state run factory.
So what does it even mean, workers control the means of production?
Not a trivial question at all and it boils down who has power. And often or rather allmost always it developed to: not the workers working there.
But even if you would make a iron socialist law, that this should be the case. The workers always decide what they build - then you wouldn't have central planning anymore. And why should other workers decide to give their products to that factory?
Ah, they could negotiate contracts. Like in a free market?
Or they cannot and then it just means, they don't really control their means of production.
> Not a trivial question at all and it boils down who has power. And often or rather allmost always it developed to: not the workers working there.
> But even if you would make a iron socialist law, that this should be the case. The workers always decide what they build - then you wouldn't have central planning anymore. And why should other workers decide to give their products to that factory?
> Ah, they could negotiate contracts. Like in a free market?
> Or they cannot and then it just means, they don't really control their means of production.
To this reading, the workers cannot even exercise their ownership rights over the means of production meaningfully without free markets, thus aligning the goals of capitalism with socialism. Somehow I expect both parties to be disappointed, which might be a workable compromise?
But what do Marx and Engels or other socialists etc say about free markets and freedom to enter contracts, and what bearing those aspects have compared to owning the means of production? I don't think they were talking about stock exchanges, for example. The goals were economic, opt-in via free association of free workers, but were governmental or democratic aspects even addressed in their works?
What if workers owning the means of production looks like cryptocurrency?
Perhaps some socialists and capitalists would agree: no, not like that!
But would they be arguing out of self-interest, or would they be right about crypto not being compatible with socialism?
Wouldn't that just reduce to capitalism all over again?
Do workers do the work, or does capital?
Is capital simply a voting/allocation mechanism for a given work unit of decision-making control enacted upon the means of production?
Does owning the means of production in the economy imply controlling the means of governance in the government? Would one presuppose the other?
These are honest questions because I'm honestly curious about the answers.
> But people can be treated as slaves whether the factory is owned by a multinational cooperation, as well as a state run factory.
Doesn't capitalism just make us slaves with extra steps?
Or were we slaves to our passions all along?
Thanks for the suggestion, though!
Startup ecosystem is against free market. YC is against free market. They want the startups to grow at the cost of everything else and buy out all their competition. There is no fair competition nor free market there.