Buy now pay later
Europe Lending Paytech Trending

Klarna’s Customer Count Climbs While Its Staff Numbers Take a Hit

On the eve of its data-sharing initiative being implemented, Klarna has reached the milestone of 500,000 total consumers in Ireland whilst other areas of its business come under fire. 

The platform that has become synonymous with buy now pay later (BNPL) services has reached half a million active users in Ireland, which indicates that the appetite for its services is strong at a time when online shopping is on the rise and Irish consumers are increasingly moving away from high-cost credit cards.

Since its launch with ‘Pay in 3’ in November 2021, Klarna has brought further product updates to Irish consumers to improve the shopping experience, including an in-app money management feature, the ‘Express Checkout’ function for a faster and safer checkout process and ‘Pay Now’, which allows consumers to pay immediately and in full whenever Klarna is available.

Klarna has also launched its open banking business unit ‘Klarna Kosma’, which will be key for the next generation of Irish fintech companies to reach global scale as they will be able to access a network of 15,000 banks in 24 countries around the world through a single API.

Klarna, with over 800 merchant partners in Ireland, is committed to helping Irish retailers, both big or small, to meet evolving consumer demands and improve their customer experience.

That’s why it recently launched self-service onboarding, which allows new merchants to integrate Klarna’s checkout and flexible payment methods in just a few clicks.

Globally, Klarna has over 400,000 retail partners and recently announced reaching 150 million active consumers.

“Klarna’s growth in Ireland truly speaks about the evolving consumer trends and increased demand for flexible payments. Irish consumers are keen digital adopters and now more than ever are looking for options that can give them greater control and flexibility over how they want to shop and pay. 500,000 consumers now trust Klarna in Ireland and we will continue to disrupt the retail banking industry and grow our presence in the country,” Colin Creagh, head of business development in Ireland at Klarna commented.

Downsizing

The progression of its services in Ireland arrives in tamdem with the less-promising news that the platform is to lay off 10 per cent of its staff; totalling around 700 redundencies.

In a prerecorded message to the firm’s 7,000 staff, CEO Sebastian Siemiatkowski cited a ‘likely recession’ as the cause of the layoffs.

Speaking in the announcement, which was later posted on the company’s website, Siemiatkowski said: “While crucial to stay calm in stormy weather, it’s also crucial not to turn a blind eye to reality. What we are seeing now in the world is not temporary or short-lived, and hence we need to act.

“More than ever, we need to be laser-focused on what really will make us successful going forward. Based on this, the senior leaders of Klarna have made some really tough decisions. Some of the hardest ones we have ever had to make.”

David Beard, founder of Lendingexpert.co.uk,
David Beard

Offering an external view on the situation, David Beard, founder of Lending Expert, said: “This is distressing news for employees of Klarna and their families. Those based in the UK should check what redundancy rights they have and dig out any income or mortgage protection policies they hold.

“This news is a sign of the times – consumers aren’t spending in the ways Klarna had hoped, and I wouldn’t be surprised if we see other lenders follow suit. The writing is on the wall for a recession.”

Klarna and sharing data

As discussed in our recent spotlight on the topic, from tomorrow (1 June), Klarna will start reporting consumer spending to credit reference agencies in a move that adheres to calls for tighter, more stringent regulations to be imposed on the sector. The platform will leverage its own data to provide credit agencies with an indication of who’s paying on time and who’s falling into debt.

Payl8r
Samantha Fogerty

“For years we’ve been calling for greater regulation within the BNPL industry, and we’re delighted to hear that at long last, from June, Klarna will be reporting consumer spending to credit reference agencies,” comments Payl8r MD Samantha Fogerty.

“As one of the longest running BNPLs in the UK, Payl8r has understood the benefits of being regulated from day one meaning we’ve always shared this type of data with credit reference agencies. FCA guidance helps us lend responsibly and helps our customers manage their money, building their credit profile as they go. It’s a more ethical and responsible model that’s always worked for us, our retailers and our customers.

“Add to this our use of open banking to assess a customer’s affordability it’s easy to see why the sector is moving towards a model that Payl8r has always lived and lent by.”

Author

  • Tyler is a fintech journalist with specific interests in online banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

Related posts

Combating Financial Anxiety in 2023; What Can Banks Do To Help Protect Their Customers?

Tyler Pathe

This Week in Fintech: TFT Bi-Weekly News Roundup

Claire Woffenden

American Express to Launch Open Banking Product, Enabling UK Consumers to Pay for Online Purchases with a Bank Transfer

Mark Walker