Credit card giant Visa is buying a stake in Swedish payments firm Klarna, which serves 60 million consumers and 70,000 retailers.
The investment is a part of the plan to form a strategic partnership. Visa did not give details how much stake it has acquired, or how much it has paid to Klarna.
Recently, Klarna has obtained a banking license which will enable the company to expand into new areas, including credit card services.
Benefits for both sides
The investment will allow Visa to reach more mobile commerce merchants , especially in the Nordic area and Germany.
On the other hand, Visa partnership might improve Klarna’s position in markets where credit cards are more populat than invoice financing. These markets would include the U.S., the U.K. and the Netherlands.
“Visa has invested in Klarna for its proven expertise in consumer credit and online purchasing. Together, we share a vision for how today’s online and mobile commerce experiences can be as simple as they are in the real world. Visa is committed to partnering with a new generation of partners and payment providers to bring secure, online commerce to many more consumers in Europe. We look forward to working more closely with Klarna to accomplish this,” said Jim McCarthy, executive vice president, innovation and strategic partnership, Visa Inc.
“Klarna continually strives to offer the most advanced choice of payment solutions for our merchants and give consumers the smoothest buying experiences. Partnering with Visa will give us the opportunity to strengthen our global presence and product portfolio by leveraging our combined assets. We are excited about the possibilities of what we can do together,” said Sebastian Siemiatkowski, CEO and co-founder at Klarna.
Considering Klarna’s model of business, it has positioned itself as an alternative to credit cards like Visa. This means that Klarna and Visa have been competitors.
Visa has previously invested in technology-oriented payment providers Stripe and Square Inc. Three years ago, it also invested in LoopPay Inc., which was acquired by Samsung for $250 million.