Swedish fintech platform Klarna offered more evidence that it is pivoting away from its (controversial) buy now, pay later roots. It suggests it is moving towards a future as a shopping technology platform.
In other words, as a fintech company.
In fact, Klarna no longer refers to itself as a BNPL platform (which it is), but rather as a “leading global retail bank, payments, and shopping service.”
The industry’s effort to pivot away from the BNPL label has been a frequent topic on Localogy Insider and the This Week in Local podcast.
While CEOs like Siemiatkowski never say this directly, the pivot is likely driven by growing criticism of BNPL. The critiques generally say that BNPL is bad for consumers. Why? Because it encourages them to buy things they cannot immediately afford.
This week Klarna announced a new AI-powered discovery shopping feed in its mobile app.
According to Klarna, the new feed is “powered by Klarna’s in-house developed AI product recommendation engine, [and it] gives consumers a feed of highly personalized product recommendations to help them find and shop items most relevant to them.”
Klarna rolled out a number of new features in its shopping app. Not just to the new personalized shopping feed. These include a shopping assistant called “Ask Klarna”, and a tool to help users sell items on secondhand marketplaces. The new app also includes features for retailers, including online storefronts and an ads manager tool.
Help People Save Time, Money
Speaking on CNBC this week, Klarna CEO Sebastian Siemiatkowski acknowledged the fintech’s pivot away from BNPL in response to a question from a CNBC host.
Siemiatkowski then redirected the question. He then answered another question. And it was one that wasn’t even asked. He described what he saw as the future of consumer fintech.
“The future of financial services is not to maximize interest rate spread. Which is what the banks have been doing. This basically means paying as little as possible to depositors and charging as high an interest rate as possible. Those days are gone,” Siemiatkowski said.
“The true purpose of financial services technology is going to be to help people save time and save money. And make them less worried about their finances.”
Siemiatkowski also cited Chinese consumer trends to make the case that shopping is much more about discovery than search.
“In China, what used to be search-led commerce today is the opposite,” Siemiatkowski said. “In China, 80% of purchases on Alibaba, etc. are recommendations based.”
Not surprisingly, Siemiatkowski sees data as a key advantage as Klarna pivots from BNPL to a broader fintech play.
“We have a unique opportunity there to help our retailers grow because of the data consumers have decided to share with us,” Siemiatkowski said.
“We have a unique opportunity there to help our retailers grow because of the data consumers have decided to share with us.”
