A Swedish company is offering a service that could improve purchase results in the already-booming mCommerce market. As Richard Handford reports in a post on the Mobile World Conference website, Klarna, a firm based in Sweden, has developed a system that allows mobile device users to make purchases and pay later.
The reasoning goes that users tend to make fewer purchases via mobile devices because it’s usually such a clunky interface for inputting payment information. (Handford reports that the conversion rate for online shoppers using a computer is around two to four percent, whereas on mobile it’s only a tenth of that.) Klarna essentially takes responsibility for the payment by allowing the user to agree to pay within 14 days of the transaction, thereby removing friction from the time of the actual order. Niklas Adalberth, a co-founder of the company, says that Klarna’s system can boost the mobile conversion rate up to four percent, and that the company is making a good business out of it.
Of course, other solutions are popping up too. With many smartphones now featuring built-in biometric authentication technology, it’s allowing users to authorize payments without having to enter complex information. And with the continuing success of the Apple Pay mobile payment platform, other major companies are jumping into the ring with their own offerings, including Samsung, Google, and Alibaba. Consumers appear to be embracing the convenience of this new technology, and that could prove troublesome for Klarna down the road. Still, there will likely always be a certain segment of users and businesses who opt out of using these mobile payment platforms, and in those cases Klarna will offer a perfect solution to help smooth the path to a transaction.