The growth in the use of the financial service Buy Now, Pay Later by American consumers helped the Swedish company Klarna to record a profit in the third quarter of this year.
This payment firm last Monday, November 6, published information about its income in the period from July to September. The operating profit of this company for the mentioned three months was fixed at the level of $12 million. Klarna’s revenue figure for the third quarter was $542 million. In this case, the remarkable fact is that the company has not received a quarterly profit since 2019.
Sebastian Siemiatkowski, CEO of Klarna, says that the positive financial results recorded from July to September and the continuous dynamics of double-digit growth allowed the firm to achieve what it was striving for. He also stated that the current fantastic success is preparing the company for the active shopping period, during which the firm’s artificial intelligence-based products will provide consumers with the opportunity to earn more, find the best deals, and get inspired.
Klarna on Monday released a separate statement indicating that several achievements were recorded in the United States market from July to September. In this country, the firm demonstrated gross profit for the fourth quarter in a row.
Also, in the period from July to September, the gross value of the company’s goods increased. In this case, the growth of the indicator was recorded at the level of 46%. Another positive result of the company for the third quarter was a decrease in loan losses by 28%. Klarna’s customer base increased by 32% from July to September. Currently, the company’s platform covers 37 million consumers in the United States.
In the statement on the firm’s results for the third quarter, special attention is paid to the fact that the introduction of the Klarna Shopping Lens trading system provides users with the opportunity to receive images of goods of interest to them and instantly find places to buy it at the most favorable prices. The firm’s app, in which artificial intelligence technologies have been integrated, allows to make purchases without hindrance.
Klarna also implements its desire to help consumers make the right decisions for themselves and the planet. As part of the relevant efforts, the company offers customers a set of eco-friendly products, including a revolutionary control panel for conscious purchases. In this case, buyers can track co₂ emissions, interact with brands that support the ideology of protecting the ecology, and use circular services.
The news about Klarna’s positive financial results for the third quarter appeared immediately after it became known that the firm managed to prevent a strike by Swedish trade union workers. The company is also currently preparing the basis for an initial public offering of shares.
The firm’s positive results for the third quarter were recorded on the eve of the holiday season when installment plans like BNPL are expected to become a more popular financial management tool. The trend of increasing popularity of the mentioned service is currently observed in the UK. The Financial Conduct Authority reported an increase in the frequency of use of BNPL by the British by 10%. This trend in the United Kingdom is the result of a cost-of-living crisis that continues and shows no signs of ending soon.
At the same time, experts note that the demand for BNPL against the background of difficulties in the global economy is not a kind of feature characteristic of only one country, and has a broader scale. The mentioned service has become a necessity for American consumers who are trying to cope with financial problems caused by high-interest rates and credit card debts.
According to the results of an industry study, it was found that in the United States, 28% of Generation Z and millennials would refuse to purchase if they did not have access to BNPL. This transformation of the concept of consumer behavior, according to experts, is changing the landscape of retail payments. Against this background, BNPL becomes mandatory for buyers.
Experts say that the current trends in the sphere of financial services will continue shortly. In their opinion, the demand for BNPL is especially relevant during the holiday season, which most consumers call a period of financial stress.
As we have reported earlier, Klarna and OpenAI to Use ChatGPT as Shopping Assistant.