Banks, Financial

Banking app targets millennials who want help budgeting

Graduate debt, rent and high living costs have made it hard for millennials to save for a house, a pension or even a holiday. For Ollie Purdue, a 23-year-old law graduate, this was reason enough to launch Loot, a banking app targeted at tech-dependent 20-somethings who want help to manage their money and avoid falling […]

Continue Reading


Eurozone inflation climbs to highest since April 2014

A welcome dose of good news before next week’s big European Central Bank meeting. Year on year inflation in the eurozone has climbed to its best rate since April 2014 this month, accelerating to 0.6 per cent from 0.5 per cent on the back of the rising cost of services and the fading effect of […]

Continue Reading


Wealth manager Brewin Dolphin hit by restructuring costs

Profits at wealth manager Brewin Dolphin were hit by restructuring costs as the company continued to shift its focus towards portfolio management. The FTSE 250 company reported pre-tax profits of £50.1m in the year to September 30, down 17.9 per cent from £61m the previous year. Finance director Andrew Westenberger said its 2015 figure was […]

Continue Reading


Travis Perkins and Polymetal to lose out in FTSE 100 reshuffle

Builders’ merchant Travis Perkins and mining company Polymetal face relegation from the FTSE 100 after their recent performances were hit by political events. The share price of Travis Perkins has dropped 29 per cent since the UK voted to leave the EU in June, as economic uncertainty has sparked concerns among some investors about the […]

Continue Reading


RBS share drop accelerates on stress test flop

Stressed. Shares in Royal Bank of Scotland have accelerated their losses this morning, falling over 4.5 per cent after the state-backed lender came in bottom of the heap in the Bank of England’s latest stress tests. RBS failed the toughest ever stress tests carried out by the BoE, with results this morning showing the lender’s […]

Continue Reading

Categorized | Financial

Klarna expands online payments business

Posted on December 28, 2014

Klarna, one of the few European technology start-ups valued at more than $1bn, is planning to expand from online shopping into money transfers between individuals and payment systems for newspaper articles and public transport.

Having become a leader in ecommerce payments in Germany, France and Italy, the Swedish company is now launching in the UK and US. Its online shopping payment system has grown in popularity as it allows shoppers to buy more quickly and receive goods before paying for them, while taking on the credit risk for retailers.

    Klarna uses complex algorithms — based, for instance, on the time of day and a customer’s shopping history — to permit one-click purchases and detect fraud.

    In Sweden, about 40 per cent of the 10m population has used Klarna, primarily for online shopping. But Niklas Adalberth, co-founder and deputy chief executive, told the Financial Times that the group was looking to “use our knowledge in ecommerce in new verticals”.

    Klarna already has a deal with Dagens Nyheter, Sweden’s leading newspaper, to make buying individual articles or day passes for its website quicker and simpler. It has also teamed up with SL, which runs public transport in Stockholm, to sell bus, train and metro tickets using one click over a mobile phone.

    Mr Adalberth said other possibilities included providing airlines with simpler ways of selling additional services to passengers.

    “You could receive an SMS [saying] ‘do you want lounge access for SKr29?’” he explained. “They are still missing out on all the upside opportunities — food on flight, business class upgrade.”

    Klarna is also looking into consumer-to-consumer payments and is set to enable buyers to pay other individuals for goods on Tradera, eBay’s Swedish auction website.

    However, it is facing increased competition from an array of companies moving into mobile and online payments, including traditional payment groups such as Visa and MasterCard as well as technology companies such as PayPal and Apple.

    Klarna’s rise has not been without problems either. It faced heavy media scrutiny in Sweden when some customers in the country had problems with receiving and paying online invoices.

    Mr Adalberth said the company had changed its practices and reminded customers by text message when they had an invoice. But he conceded that the eventual payment for goods through Klarna involved “more friction” than the initial purchase on a retailer’s website.

    Klarna is now seeing a surge in mobile use. Mr Adalberth said mobile transactions accounted for almost half of the total, up from a fifth in March.

    He added that Klarna had increased the sales conversion rate — how many completed sales a retailer gets after a customer puts something in their shopping basket — to 50 per cent on mobile devices, from an average of 3 per cent when the company’s services were not used.

    The Swedish group is investing at least $100m in its push into the US as it enters the home turf of larger rivals such as PayPal and Square.