One of Europe's few billion dollar-plus start-ups, Klarna, is expanding its business from online shopping into P2P money transfers and payment systems for newspaper articles and public transport.
Klarna, in its current instantiation, is an algorithm backed system that allows users to make one click purchases while it scans for fraud in the background. The service is popular in Europe, particularly its home country of Sweden, where about 40 percent of the 10 million person population has used Klarna, primarily for online shopping. But co-founder and deputy chief executive Niklas Adalberth told the Financial Times that the compnay is now looking to “use our knowledge in e-commerce in new verticals."
Dagens Nyheter, Sweden’s leading newspaper, has already signed on with Klarna 2.0 to make the purchase of indvidual articles or day passes for its website a more streamlined process. SL, which runs the public transport in Stockholm, is also an early adopter of Klarna’s expanded service repertoire and will be using the service to sell bus, train and metro tickets using one click over a mobile phone.
Airlines also represent a potential use case for the service, according Adalberth.
“You could receive an SMS [saying] 'do you want lounge access for SKr29?’” he explained. “They are still missing out on all the upside opportunities — food on flight, business class upgrade.”
On the consumer-to-consumer payments side, Klarna plans to enable buyers to pay other individuals for goods on Tradera, eBay’s Swedish auction website. It enters that vertical with some comeptition, particularly from established players such as Visa and MasterCard, as well as technology companies such as PayPal and Apple.
The Swedish group is also investing at least $100m in its push into the US where it will compete head on with PayPal and Square.