How Klarna Works

Klarna is one of the biggest ‘buy-now, pay-later’ services in the world, and you’ll probably have seen their logo in a few familiar places, like ASOS, Topshop and Wayfair.

The idea is that you can buy something from one of their participating retailers, receive the item, and pay for it through Klarna later on.

And it seems to be working well. As I write this, Klarna is a $10 billion company, and they claim to process more than a million transactions every day.

So, you can imagine how meaningful a 1% improvement in their customer retention would be. Even 0.1% would be noticeable.

Well, let’s explore the UX mistakes that Klarna are making, and ultimately how they could improve their product fairly easily.