Klarna’s push into authentication and identity could be a gamechanger for retailers

By Oliver Smith on Thursday 4 April 2019

Digital Banking

The $2.5bn Swedish Fintech has another innovation which could transform online shopping.

Klarna’s push into authentication and identity could be a gamechanger for retailers
Image source: Klarna/Sebastian Siemiatkowski

Pay-it-later giant Klarna has always offered a painless checkout experience, using an email address and date of birth to quickly pay across a host of retailers.

Now the Swedish fintech, led by cofounder and CEO Sebastian Siemiatkowski, is opening more of this technology up for retailers to use.

Today Klarna announced a suite of authentication technologies for retailers to take this tech beyond just the checkout, and use Klarna as the login provider for their whole site.

The advantage, Klarna says, is that as its platform is so vast with data from over 60m customers, it’ll allow retailers to personalise their storefronts.

An example would be if you buy new shoes at JD Sports, for example, and pay with Klarna, maybe Asos will know not to promote new shoes if you logged in with Klarna.

And unlike other advertising systems (sorry Amazon), Klarna’s should be smart enough to know not to promote stuff that you’ve actually bought.

“Offering an authentication platform that minimises the friction, offers a personalised experience and doesn’t compromise the overall user flow, will not only benefit customers everywhere, but also provide a competitive advantage for businesses,” said Nir Aravot, Klarna’s product manager for its customer authentication platform.

The authentication won’t just include Klarna’s email login, but also SMS, bank login, social login and some upcoming Klarna-developed methods like a scan of your ID.

Klarna has long owned the pay-it-later space in Europe, with a quick and easy way to pay on credit, now it seems the giant is keen to move into the identity space.

While Facebook and Google have long owned the social login space, the benefit for retailers has been minimal beyond the reduction of friction in signing up.

If Klarna can offer retailers a data-powered advantage, that could be a gamechanger.

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