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The Swedish ‘buy now, pay later’ start-up posted a significant jump in credit defaults as it pushed into new markets. At the same time, retail banks like Monzo, Revolut, Virgin Money and Barclays have either trialed or have recently rolled out BNPL products of their own bringing competition to the space. The CEO of Klarna is not worried, comparing their efforts to retailers’ who have pivoted into ecommerce. “If they really go for it full-heartedly and make necessary changes, some will be able to succeed,” he said.
“We are now serving more than 100m active customers across the world,” said chief executive Sebastian Siemiatkowski. “On a percentage basis, we’re also seeing much lower losses per transaction volume.” Highlight text Credit defaults of SKr4.6bn, up from SKr2.5bn in 2020, were a significant proportion of losses. The start-up, which was last year valued at $46bn, said they were “entirely explained by Klarna’s growth, expansion to new markets and massive inflow of new customers”. More than a third of credit defaults came in the fourth quarter, which Siemiatkowski said reflected variances in provisioning for loan losses and seasonal growth during the holiday period.
https://www.ft.com/content/8ff87375-476b-4322-bc33-a483a471b8fc
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