The announcement comes as Klarna tries to take on PayPal, which is one of the major payment players in the U.S. Lyst runs an online mall and personal shopping service that provides customers with access to a slew of brands. Lyst is based in the U.K. and lets shoppers create personalized lists of the designers they want to purchase from. The goods range from the super high-end to the super cheap. The announcement on the part of Klarna, which processes around 10 percent of the payments in Europe, is seen as a direct hit against PayPal. After all, Lyst is well-known enough to have its choice of payment partners but chose Klarna over PayPal.
“It’s a signal that PayPal has a harder time in Europe than it does in the U.S.,” said Sucharita Mulpuru-Kodali, an eCommerce analyst at Forrester Research, in an interview with Reuters. “Klarna’s brand equity is much stronger in Europe. They have strong traction.”
With Klarna’s service, consumers can purchase clothing and accessories by entering their email address and zip code. Consumers can also choose to pay after delivery of the products, with Klarna taking on the risk by paying the retailer once the order is purchased. While it has entered the U.S. market, it is facing tough competition from PayPal, which continues to grow.
In the U.S., PayPal is one of the most dominant payment companies in the FinTech space. For its most recent quarter, it announced total payment volume increased 29 percent from a year ago to an eye-opening $81 billion, besting analyst expectations for the first quarter. Revenue climbed 19 percent to $2.54 billion, also beating Wall Street expectations. PayPal CEO Dan Schulman called the first quarter one of the best since he joined the company in 2014.