Klarna to Offload Checkout Business in $520 Million Deal
Hey Payments Fanatic!
Klarna Ban is set to divest one of its key payments businesses due to conflicts of interest with competitors such as Adyen NV and Stripe Inc. An investor consortium led by serial entrepreneur Kamjar Hajabdolahi has agreed to acquire Klarna’s Checkout business in a deal valued at 5.4 billion kronor ($520 million), according to documents obtained by Bloomberg News.
Klarna's Checkout service has provided merchants with two primary options for integrating its payment solutions. Retailers could either work directly with Klarna or use payment service providers like Stripe or Adyen to offer Klarna's payment options. This dual approach positioned Klarna both as a collaborator and a competitor to these payment service providers.
The conflict arose because Klarna needed to maintain strong partnerships with these providers to ensure its services were prominently featured alongside competitors like Apple Pay and PayPal, while also directly competing with them for merchant business through the Checkout solution.
“Klarna is looking to divest the Klarna Checkout to remove the friction and completely focus on working with its distribution channels,” according to the documents. “Thus, creating a simple relationship to all partners without the PSP vs Checkout conflict.”
Since 2021, Klarna has concentrated on strengthening its relationships with payment service providers and has not actively developed or promoted the Checkout solution. Despite this, the Checkout unit remains a significant contributor to Klarna’s profitability in Europe, commanding over 40% market share in Sweden.
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PAYMENTS NEWS
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GOLDEN NUGGET
Apple𝐏𝐚𝐲 — 𝐚 𝐬𝐢𝐦𝐩𝐥𝐞 𝐞𝐱𝐩𝐥𝐚𝐧𝐚𝐭𝐢𝐨𝐧 𝐨𝐟 𝐡𝐨𝐰 𝐢𝐭 𝐰𝐨𝐫𝐤𝐬 👇
𝐖𝐡𝐚𝐭 𝐢𝐬 𝐀𝐩𝐩𝐥𝐞 𝐏𝐚𝐲?
ApplePay is a mobile payment and digital wallet service by Apple that allows users to make payments using an iPhone, Apple Watch, iPad, or Mac. It digitizes & replaces the traditional credit card and debit card chip and PIN or magnetic stripe transaction at point-of-sale terminals.
𝐇𝐨𝐰 𝐀𝐩𝐩𝐥𝐞 𝐏𝐚𝐲 𝐖𝐨𝐫𝐤𝐬:
1️⃣ 𝐒𝐞𝐭𝐭𝐢𝐧𝐠 𝐔𝐩: Users add their credit or debit cards to the Apple Wallet app on their iOS devices. The card information is not stored on the device or on Apple servers. Instead, a unique Device Account Number is assigned, encrypted, and securely stored in the Secure Element on your device.
2️⃣ 𝐌𝐚𝐤𝐢𝐧𝐠 𝐏𝐚𝐲𝐦𝐞𝐧𝐭𝐬:
🔸 𝐈𝐧-𝐒𝐭𝐨𝐫𝐞 𝐏𝐚𝐲𝐦𝐞𝐧𝐭𝐬: Users hold their device near a contactless reader with their finger on Touch ID or double-click the side button and glance at their iPhone or Apple Watch to authenticate with Face ID.
🔸 𝐈𝐧-𝐀𝐩𝐩 𝐚𝐧𝐝 𝐎𝐧𝐥𝐢𝐧𝐞 𝐏𝐚𝐲𝐦𝐞𝐧𝐭𝐬: Users select Apple Pay at checkout and authenticate using Face ID, Touch ID, or their passcode.
3️⃣ 𝐒𝐞𝐜𝐮𝐫𝐢𝐭𝐲: ApplePay uses tokenization, a method where sensitive information is replaced with a unique identifier or token (i.e. your payments information or data). When you make a purchase, the token, along with a cryptogram (a one-time use, dynamic security code), is sent to the retailer for payment.
4️⃣ 𝐓𝐫𝐚𝐧𝐬𝐚𝐜𝐭𝐢𝐨𝐧 𝐏𝐫𝐨𝐜𝐞𝐬𝐬:
🔸 The token is sent to the card issuer (bank).
🔸 The bank verifies the token and cryptogram.
🔸 The bank authorizes the transaction.
𝐇𝐨𝐰 𝐭𝐨 𝐔𝐬𝐞 𝐀𝐩𝐩𝐥𝐞 𝐏𝐚𝐲
1️⃣ 𝐀𝐝𝐝 𝐚 𝐂𝐚𝐫𝐝: Open the Wallet app, tap the "+" button, and follow the steps to add a new card. Your bank or card issuer will verify your information, and you might need to provide additional verification.
2️⃣ 𝐈𝐧-𝐒𝐭𝐨𝐫𝐞 𝐏𝐚𝐲𝐦𝐞𝐧𝐭:
🔸 Hold your iPhone near the contactless reader.
🔸 Authenticate with Face ID, Touch ID, or your passcode.
🔸 A checkmark and "Done" will appear on the display, indicating the payment was successful.
3️⃣ 𝐈𝐧-𝐀𝐩𝐩 𝐚𝐧𝐝 𝐎𝐧𝐥𝐢𝐧𝐞 𝐏𝐚𝐲𝐦𝐞𝐧𝐭:
🔸 Choose ApplePay at checkout.
🔸 Confirm the payment using Face ID, Touch ID, or your passcode.
4️⃣ 𝐎𝐧 𝐀𝐩𝐩𝐥𝐞 𝐖𝐚𝐭𝐜𝐡: Double-click the side button and hold the display of your Apple Watch near the contactless reader until you feel a gentle tap and hear a beep.
𝐁𝐞𝐧𝐞𝐟𝐢𝐭𝐬 𝐨𝐟 𝐀𝐩𝐩𝐥𝐞 𝐏𝐚𝐲
👉 Convenience
👉 Acceptance
👉 Security —Enhanced security features like tokenization and biometric authentication.
👉 Privacy — Apple doesn't store or track transaction information.
Apple just hit $3T in market cap after their annual WWDC event. Next up, "Tap to Pay for Apple Cash" + AI 🚀
Source — Apple
And I highly recommend following my partner at Connecting the dots in payments... Arthur Bedel 💳 ♻️ for more great updates like this one👌
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