Buy Now, Pay Later (BNPL) has moved from a novel option to a must-have for retailers that aim to meet the demands of modern consumers. In fact, the total amount of BNPL payments is projected to grow by 16.2% on an annual basis to reach US$484.7 billion in 2024.
“The growth in BNPL usage is fueled by the increasing preference for cashless transactions and the rapid expansion of e-commerce, where consumers increasingly seek flexible, interest-free payment plans to manage their online purchases,” says Erin Jaeger, Head of North America with Klarna.
BNPL has gained widespread acceptance among consumers seeking alternative payment options and better ways to control their finances. The option is particularly attractive to younger generations—Klarna reports that 45% of its global shoppers are Gen Z and Gen X, and 40% are Millennials.
“The convenience of having the option to pay now, or split payments into manageable installments without interest makes BNPL very appealing,” Jaeger says. But the benefits aren’t only for customers. With Klarna’s integration for Adobe Commerce and Magento Open Source, Adobe merchants can leverage BNPL to help drive their business growth, from attracting new customers to boosting overall sales.
Consider these five ways that the Klarna integration for Adobe Commerce and Magento Open Source can pay off for your business:
1. Enhance the customer experience. One of the most powerful ways to improve your shopping experience is by offering flexible payment options, allowing more customers to complete their purchases. Integrating Klarna’s BNPL services allows customers to split their payments into manageable installments, pay later, or even try before they buy. This flexibility not only increases customer satisfaction but also drives higher conversion rates and reduces cart abandonment. Customers can also track and manage their purchases, find deals and earn rewards in the Klarna app, leading to increased purchase frequency.
2. Boost overall sales and average order value. “At Klarna, we see a 20% increase in conversions, a 40% increase in average order value, and a 45% increase in purchase frequency among the companies that utilize our BNPL services,” Jaeger says. This is because Klarna’s flexible payment methods increase perceived purchasing power, giving customers the confidence to buy and leading to more completed transactions for the merchant. For example, with Pay Later in 30 Days, Klarna allows customers to try on multiple items before making a final decision, reducing some of the hesitation associated with online shopping in the fashion industry. In the luxury, home, and electronics verticals, the ability to spread out payments makes high-end items more accessible. Even down to everyday subscription services like music streaming, mobility services, and transportation, offering customers the ability to bundle purchases and control their payments can lead to increased frequency of use. Adobe Commerce merchants can leverage Klarna’s flexible payment methods to offer an elevated shopping experience for their customers and boost their sales, new customers, and repeat purchasers.
3. Attract new customers. By offering flexible payment options to their customers, retailers can attract a broader and more diverse customer base. “With a global network of over 85150 million active consumers, and a large proportion of those being Gen Z and Millennials, Klarna has a unique ability to drive new customer acquisition for our merchant partners,” Jaeger says. These shoppers are often more budget-conscious and prefer to spread out their payments over time rather than making large upfront expenditures. Klarna’s flexible payment options align perfectly with their spending habits, providing the financial flexibility they seek. This makes it easier for merchants to engage with this fast-growing, digital-first segment of the population, which is increasingly influential in the retail market. With the Klarna integration for Adobe Commerce, merchants can access the 28 million monthly active users in the Klarna App, which drives 2.3 million daily leads to retailers. This exposure can increase a merchant’s visibility and attract new customers who might not have discovered their products or services.
4. Secure transactions and brand trust. Leading BNPL services provide robust security features and consumer protections that safeguard transactions and foster trust between merchants and customers. “Trust is essential to build and maintain strong customer relationships, especially from a financial services provider,” Jaeger says. Klarna, for example, assumes the credit risk by paying the merchant upfront while collecting payments from the customer over time. This reduces the risk of fraud and chargebacks for merchants, as Klarna handles customer verification and fraud prevention measures. Customers who use Klarna can trust that they will save time and money and be in control of their finances. Associating with a trusted BNPL brand like Klarna can help Adobe Commerce merchants attract customers who are familiar with and prefer Klarna’s payment solutions.
5. Access a bigger marketing ecosystem. With the Klarna integration, Adobe Commerce merchants can tap into Klarna’s extensive marketing ecosystem, enhancing their ability to attract and retain new customers. Through the Klarna App, merchants can highlight their brands and products to a highly engaged audience, who spend and purchase significantly more than the average shopper. As a top publisher in some of the world’s largest affiliate networks, merchants can also gain access to always-on content opportunities native to the Klarna shopping experience, driving conversion rates and average order values that are significantly higher than global network averages. Adobe Commerce merchants can receive the support of Klarna’s Partner Success Teams, which include marketing experts who can help retailers promote Klarna’s shopping solutions to their customers and develop tailored performance marketing strategies to reach and convert new customers.
Ready to launch
For Adobe Commerce and Magento Open Source merchants, installing the Klarna extension from the Adobe Commerce Marketplace allows them to access the benefits of BNPL. When you are ready to begin accepting Klarna transactions on your site, Klarna’s Partner Success Teams can help you with brand guidelines, best practices, and marketing strategies to promote flexible payment options to your customers.
If you’re interested in learning more about BNPL, check out the Klarna integration for Adobe Commerce today.
