Shopify has added payment solution provider Klarna to its Shopify Plus Technology Partner Program, which targets high-growth, high-volume businesses. Through the program, Shopify Plus merchants in the U.S., U.K. and Germany will be able to integrate Klarna’s payment suite into their stores and receive additional access to customization and APIs that aim to improve the user experience.
The two companies originally partnered in 2016, when Klarna services were first made available to stores on the Shopify platform. These services provide customers with various payment solutions to suit their needs, whether that is paying after a 30-day trial period, in monthly installments or in four equal installments. Klarna assumes the risk so that the merchants still receive their payment upfront — a necessity for smaller businesses developing their brand.
The model of buy now, pay later is particularly popular for luxury items and among the millennial generation. With an abundance of product choice — but also more awareness of sustainability and investment purchases — customers are often drawn to brands that provide them with more flexible purchasing options. Companies like Klarna, Afterpay and Affirm also appeal to buyers who are working with stricter budgets, thus opening up retail to a wider range of consumers.
“With Shopify and Klarna, we’ve been able to reduce complexity, be more flexible and thereby deliver an overall better shopping experience for our customers,” said Markus Giesswein, CEO of global footwear company Giesswein, which has utilized the Shopify service. “After only 30 days with Klarna ‘pay later,’ we saw a volume growth of 5 percent and the conversion rate increased by 20 percent.”
This focus on accelerating sales as smoothly as possible is particularly prevalent among merchants at a high-volume, high-growth stage — and they are the basis of the Shopify Plus program. Its products specifically cater to businesses in this phase. Services range from marketing automation to business intelligence and reporting, as well as customer support. Current Shopify Plus merchants include Rebecca Minkoff, Kith and The Hundreds.
This partnership comes at an important time for small and medium businesses. A recent Q4 survey by Wells Fargo showed that optimism among small-business owners is at a record high, with respondents attributing their upbeat attitude to positive business financials. Of those surveyed, 90 percent predicted either improved or maintained working environments in 2019, though one of the biggest challenges cited was attracting new business.