The news: Klarna launched a service called Sign in with Klarna to enable faster online checkout, per a press release.

• When registering, a consumer chooses what data to share with the merchant and whether to sign up for any merchant-offered membership programs.
• The service then automatically fills in the customer’s details anytime they use the option.
• The service is available in 23 countries, including the US, the UK, Canada, and Mexico.

Klarna said it launched the service because Apple's and Google’s elimination of third-party cookies has made it harder for payment services to automatically fill in customer details at checkout.

What’s in it for merchants?

• Merchants can use the consented personal data for memberships or to give recommendations based on purchase histories.
• They also don’t need to work with third-party services to confirm the customer's identity via email or SMS.
• And integrating the service could help merchants increase conversion rates: 60% of online shoppers will abandon their cart if it takes more than two minutes to check out, per Stripe.

How this helps Klarna: The benefits are twofold for Klarna—it's both an information play and a payments play.

• Because they’re logged in with Klarna, shoppers will be more likely to pay with Klarna; they don’t have to input any payment information. Whether they use pay now or pay later, Klarna gets more volume.
• Data monetization is also a vital part of Klarna’s business, and this launch helps the firm maintain control over customer information on the web.
• Klarna could also sell that consumer data to advertisers, which may become more valuable in a post-cookie world.

The bigger picture: Innovating its offering and leaning into non-BNPL revenue streams will be crucial for Klarna going forward.

• Many BNPL providers have achieved profitability in recent quarters thanks to efforts like layoffs and reducing risk profiles.
• But these measures won’t grow their profitability in the long term because the interest-free BNPL model is inherently a low-margin business: BNPL profit margins were just 1.01% in 2021, per the CFPB.
• Leaning into data monetization can bring in bigger revenues.
• This service can also strengthen brand loyalty to Klarna and increase customer engagement going forward.

This article originally appeared in Insider Intelligence's Payments Innovation Briefing—a three-times-weekly recap of top stories reshaping the payments industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.

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