The partnership is set to enable businesses using Stripe in the US and 19 European countries to accept Klarna with any kind of Stripe integration, requiring no additional paperwork for eligible businesses to offer the financing model.
Stripe says that early results showed a 27% increase in sales on average after integrating with Klarna, with average order value increasing 41%. This is very promising for both companies ahead of the holiday season, not only because it grows Stripe’s merchant service offerings but also because it expands Klarna’s revenue pool and consumer reach.
“Together with Stripe, we will be a true growth partner for our retailers of all sizes, allowing them to maximize their entrepreneurial success through our joint services,” Klarna chief technology officer said Koen Koppen stated in the release.
Klarna is hoping this deal will enable it to maintain its ground in the BNPL space, as rivals Square, PayPal and Affirm make large moves into the space. Credit card providers Visa and Mastercard have also entered into the sector, with both companies recently integrating no-interest lending options into their existing card frameworks.
BNPL has recently led to fears over consumer risk, with critics arguing that the installment model encourages vulnerable people and young consumers to spend money outside of their budget. The UK Advertising Standards Authority banned several Klarna advertisements last year, followed by the UK Treasury recently launching a review of the market earlier this month, according to Financial Times.
This partnership is also set to increase the two largest private fintech’s relationship in North America. Stripe is now used in approximately 90% of Klarna’s payment processing volume in the US and Canada, according to CNBC.
In other recent fintech news, Socure launched Sigma Identity Fraud to bind device data to individuals. CB Insights also released its Q3′ 2021 fintech report, detailing another record quarter for venture funding worldwide.