What are the actual benefits that Klarna offers to merchants beyond just increasing conversion rates?

It's no doubt that they improve conversion rates, I think the question is at what costs.

Typically, let's say heading into a wedding season. So the beginning of summer, let's say someone will go to four weddings, which means potential for 10, 12 outfits that they might be buying. Now that's a pretty big outlay.

If you are 26 or 27, the idea being that if you've got a basket of $280 to $380 and you can split that over four payments, as your salary comes in, probably is quite appealing. I suspect that the conversion rate does go up and I think that's what Klarna is all about.

Now, if you look at what they're trying to do themselves as a company, they're trying to build up their relationship with the customer a lot more. So they've got their own app, which they're trying to encourage people to go and purchase through. I think that's because they want to have a relationship directly with the customer.

Secondly, they want to have some of that first-party data. I suspect a lot of that is probably held back from them. They probably know a bit about you in terms of your creditworthiness, but they are looking to learn about your shopping habits.

At the moment it's really about conversion. I think with Klarna, they need that first-mover advantage.

So they need to be the first at ASOS, the first at H&M etc. You keep seeing the name over and over again, and then you trust them more than someone else.