#H&M takes stake in payment company #Klarna

Fashion retailer H&M is investing $20 million in Sweden-based online checkout solution provider Klarna. For context, Klarna offers installment-like online financing options, called Klarna Checkout, giving customers 30 days to pay for their purchases. Klarna Checkout Business Insider Intelligence Through the partnership, Klarna will power the H&M Club payment program — the retailer's digital loyalty program — and be offered as a payment option in-store or on the retailer's website and mobile channel. Klarna's solution will be deployed throughout 14 H&M markets starting in 2019, beginning with the UK and Sweden. This investment could accelerate Klarna's expansion in two key ways: It builds on Klarna's moves to expand globally. Klarna — which accounts for 10% of all e-commerce in Northern Europe — has been working on its global expansion efforts. The firm moved into the US in 2014, and counts over 60 million customers and 100,000 merchant clients globally. And most recently, Klarna announced plans to acquire UK-based Close Brothers Retail Finance, an omnichannel retail financing provider. This new partnership can accelerate Klarna's expansion play and give it insights into which markets are ripest to fully launch its solution in the future. And it can propel awareness of the firm's offerings, furthering its other business efforts. When the partnership takes effect, it will give Klarna immediate access to H&M's network of 4,700 stores throughout 14 geographies. Having an in-store presence can be a streamlined way for Klarna to not only increase volume but also push consumer awareness of its services. And if the partnership proves to be successful in driving sales for H&M, it can attract other retailers that might want to offer flexible payment solutions. That awareness among consumers and retailers can also help propel Klarna's other efforts going forward — Klarna is preparing to launch its first banking product, a payment card that offers detailed statements, delivery tracking, and customer service, for example. The partnership can allow Klarna to continue growing alongside demand for installment payments.Increased consumer awareness and the number of consumers who prioritize budgeting are driving the popularity of point-of-sale (POS) financing for a wider variety of purchases. Half of customers would prefer an installment loan over other payment types for purchases under $250, according to an Affirm study, which could indicate consumer willingness to try Klarna in-store for lower value purchases. And more firms are developing their own solutions as they recognize the customer preference for installment options — Square recently rolled out an installment offering for its sellers, for example. Forming partnerships and making acquisitions is an effective way for Klarna to access merchants in major regions, which can ultimately help it solidify its position as a leader in the alternative financing space. Source: http://www.businessinsider.fr/us/hm-klarna-checkout-solution-2018-10