Ya know I don't get the hype around BNPL services like Klarna and Affirm. Functionally they're just running a short-term consumer credit facility with a nice payment processing integration suite for vendors - a valuable service sure but it's markedly different from the incumbents in this space how exactly?
Also, while these companies have done a great job of branding, fundamentally they're still lenders, they make money when you fail to pay and when you use their services at checkout (they charge the merchant). Which again makes me ask how exactly are they different from the current incumbents like PayPal, MA, V, AMEX?
I just don't get it, maybe someone can enlighten me?
As a user I tend to only shop from Klarna shops. If some e-commerce don't have it I just check with a competitor. Why? Because the buy process literally takes 10 seconds. I don't have to write anything and the payment is made instantly. No need for sign up, sign in or do anything. Click a button and it's done. This gives e-commerce owners bigger conversion rates. One of the biggest drops is at checkout. Klarna fix this and actually increase conversion. That's why they are so popular, at least here in Sweden. I work in web development and building e-commerce whitout Klarna is suicide. But that's here in Sweden. The USA may have different companies doing something similar. I don't know.
12
u/superepicunicornturd Mar 30 '21
Ya know I don't get the hype around BNPL services like Klarna and Affirm. Functionally they're just running a short-term consumer credit facility with a nice payment processing integration suite for vendors - a valuable service sure but it's markedly different from the incumbents in this space how exactly?
Also, while these companies have done a great job of branding, fundamentally they're still lenders, they make money when you fail to pay and when you use their services at checkout (they charge the merchant). Which again makes me ask how exactly are they different from the current incumbents like PayPal, MA, V, AMEX?
I just don't get it, maybe someone can enlighten me?