Radial, Klarna Get Together on Checkout Financing
“Easy financing.” That’s a term that goes back a long ways—it’s actually kind of part of the theme from 70s show “Good Times”—and has its share of meaning built right in. While it can feel like an invitation to overspending and greed, it can also be a useful tool for allowing certain economic gaps to be more readily bridged.
Recently, the more positive aspects of easy financing were demonstrated by a new move from Klarna and Radial, who can now allow users access to a financing option right at the checkout point.
Early reports suggest that this new payment option could mean increased order quantities for retailers, who may see an order value as much as 58 percent higher than what it was. Customers likewise would have more options, including many of the same options found in regular stores.
Normally, financing is a move that works best for brick-and-mortar operations; call it one of the medium’s secret weapons. With an online version, however, that would peel away one of those last stands and give online shops that much more firepower to work with.
Radial’s chief product and strategy officer Stefan Weitz commented “Radial’s partnership with Klarna enables our clients and prospects to offer their customers payment flexibility with convenient, low APR financing options. Giving customers a straight forward financing option is not only convenient for them, but benefits our retailers’ order value. No smoke and mirrors and hidden costs, it’s just simple financing and approval to give customers what they want, when they want it. It’s a fantastic way to reduce friction in the purchase process to convert more shoppers to buyers.”
Terrible news for brick-and-mortar, great news for online retailers; it’s yet another subtle shift in that balance between the two systems, and one more thing brick-and-mortar will have to desperately fight against lest it lose still more market share.
Giving customers the option to finance online purchases might well tip some scales in balance of buying more than would have ordinarily been bought, especially for high-dollar purchases like larger televisions and the like.
Hopefully brick-and-mortar retailers can figure out a way to get some of its edge back on the competition. If not, all our shopping may be online soon.