Klarna CEO safeguards service in spite of huge losses and layoffs

Klarna CEO defends business despite massive losses and layoffs

Revealed: The Secrets our Clients Used to Earn $3 Billion

Klarna CEO Sebastian Siemiatkowski has actually safeguarded his business’s service design and the questionable “buy now, pay later” market.

Klarna offers consumers the choice of when to spend for a product– they can pay in advance, pay in installations or hold-up payment for a particular amount of time. Critics state this allows individuals to purchase things they may not always have the ability to manage, although Klarna states it runs price checks to guarantee that customers can pay them back.

In an interview with CNBC’s “Squawk Box Europe” on Friday, the Swedish business owner stated BNPL is “superior” to the charge card design, declaring that the average Klarna user has an exceptional balance of $50, whereas the typical charge card user has an exceptional balance of $5,000

Siemiatkowski went on to state his service is “extremely recession-proof” compared to standard charge card companies. However, the fintech reported a loss of $748 million in 2015 and last month revealed that it was laying off around 10% of its 6,500 personnel as part of an effort to cut expenses.

On top of that, Klarna will quickly be taking on Apple in the BNPL sector after the iPhone maker revealed today that it prepares to get in the marketplace with a brand-new item called Apple Pay Later.

That puts BNPL gamers like Pay Friend, Affirm and Klarna in an uncomfortable area. The worry is that Apple, a $2 trillion business and the world’s second-largest smart device producer, might draw customers far from such services. Shares of Affirm have actually sunk 17% up until now today on the news.

“I think it’s a final, massive embracement of what to me is a much healthier form of credit,” Siemiatkowski stated of Apple’s entry into the marketplace.