Reducing checkout friction has become one of the most important goals for ecommerce merchants. Every additional step, form field, or payment requirement introduces the risk that a shopper will abandon their purchase before completing the transaction. As consumers increasingly shop on mobile devices and expect fast, seamless experiences, merchants are looking for new ways to simplify payments while maintaining security and convenience.
The partnership between ACI Worldwide and Klarna is designed to address checkout friction by streamlining the online payment experience. By allowing consumers to complete purchases without entering traditional card details at checkout, the companies aim to create a faster path to conversion while helping merchants reduce cart abandonment and increase completed sales.
Any online retailer knows that the checkout process is crucial to their business. It’s the moment when shoppers finally make their purchase and become paying customers. Unfortunately, the checkout process can also be a major source of frustration for shoppers, leading to checkout abandonment and lost sales. There are a number of reasons why checkout friction occurs, from complex checkout forms to hidden fees and charges. However, there are also a number of ways to reduce checkout friction, streamline e-commerce, and make the process simpler and more user-friendly. By reducing the number of steps in the checkout process, providing clear and upfront pricing information, and offering customer support throughout the process, retailers can make it more likely that shoppers will complete their purchase.
Online shoppers are getting what just they want—faster payment and checkout. ACI and Klarna are teaming up to reduce the checkout friction in E-commerce shopping, as the following article reports.
There’s an argument made in favor of keeping plastic cards and online shopping, but Swedish payment company Klarna is not on that side, based on its recent effort to rid customers of the need to use their cards online.
Klarna partnered yesterday with payments technology provider ACI Worldwide to bring this feature to ten markets, including the U.S. Through ACI’s UP e-Commerce Payments API, Klarna can now enable businesses in these markets to provide consumers with Klarna’s “Pay later” and “Slice it” payment options.
These two options let consumers manage their payment terms, and do not require the consumer to use their card information at the point of checkout online. Instead, consumers can check out using their emails and postal codes. The feature is beneficial from the merchants’ point of the view too, as Klarna takes on the credit risks associated with the transactions.
Based in Stockholm, Klarna is an e-commerce payments provider with a European banking license, granted to it last June.
The company has been making big strides since its founding in 2005. In fact, in September 2017, it was listed as the highest-funded fintech startup in Europe, receiving over $598 million in funding from the likes of Visa and U.S. venture capital firm Sequoia Capital to name a few. More recently, it partnered with another payments company, Worldpay, to provide its credit-based payment features to additional markets across Europe.
This partnership with both ACI and Worldpay is a part of the company’s overall growth strategy of expanding beyond its core Nordic markets. Besides the U.S., the other nine markets where this ACI-powered Klarna solution is available in include the U.K., Norway, Sweden, Finland, Denmark, Germany, Austria, and the Netherlands.
Checkout abandonment is one of the key pains for e-commerce merchants. Online shoppers are often impatient and too many clicks send them off to other websites. Streamlined checkout becomes even more important as mobile devices and their smaller keypads are increasingly used for shopping. ACI gives Klarna a global reach as they look to expand beyond their home turf, and both will benefit.
Conclusion
As ecommerce continues to evolve, reducing checkout friction remains a critical factor in improving conversion rates and customer satisfaction. Consumers increasingly expect fast, intuitive payment experiences that minimize data entry and allow them to complete purchases with as little effort as possible. Solutions that simplify the checkout process can help merchants capture more sales while reducing abandonment rates.
The ACI-Klarna partnership demonstrates how payment providers are rethinking online commerce by offering alternatives to traditional card-based checkouts. By combining flexible payment options with a streamlined user experience, the companies are positioning themselves to capitalize on growing demand for frictionless digital payments across global markets.
Overview by Raymond Pucci, Associate Director, Research Services at Mercator Advisory Group
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