Klarna CEO Sebastian Siemiatkowski spoke at a Fintech event held in London on Monday, April 4th, 2022.
Chris Ratcliffe | Bloomberg via Getty Images
Klarna’s CEO is so bullish about artificial intelligence that he sees Fintech’s 100 million users trying to diversify the company’s services turn banks into banks every day.
On Wednesday, Klarna, a pioneer of popular “buy now, pay later” payment methods, announced the launch of a mobile phone plan in the US through a partnership with Telecom Services Startup Gigs. The plan comes with unlimited data, calls and text, and costs $40 a month.
The new phone is consistent with CEO Sebastian Siemiatkowski’s vision and will become a comprehensive, personalized “super app” for all that can provide services outside of traditional financial realms.
It was not the company’s first attempt. Previously, Klarna tried to make it look something similar to an “super app” that resembles Ant Group’s Alipay and Tencent’s Wechat Pay. This is “confusing for customers,” Siemiatkovsky told CNBC in an interview.
However, Klarna’s boss highlighted the parts that AI can play in Klarna’s fresh attempts.
“In this new world of AI, I think there will be better opportunities to provide different services to our customers and historically adopt clarification and visualization of the levels of these services,” he said.
“Using AI allows you to abstract and adopt more experiences for the specific users you are dealing with,” Siemiatkowski said in an interview.
Super apps are popular in China and other parts of Asia. For example, it aims to serve as a one-stop shop for all your mobile needs. For example, you have taxi hails and food orders in the same place as your payment and messaging services.
Super apps flourish in Asia, but adoption in the Western market has been slower for many reasons.
“An incredible opportunity”
Siemiatkowski says he spends a lot of his time focusing on AI.
“There’s a lot of opportunity for that, but it just works,” he said. “Everyone who has used it knows it can spit out some exciting stuff, but that’s what you need to make sure it works every time.”
Going forward, Klarna’s chief believes the platform will become a “digital financial assistant” for daily banking needs.
“If you have information that suggests you’re overpaying due to carrier subscriptions, data, etc., we can provide you with suggestions for a better pricing model, but you can also click and implement it to make it a reality,” Siemiatkowski said.
Siemiatkowski acknowledges the issues with Klarna’s previous attempts to become a super app, saying the technology was not “matured” enough at the time.
Klarna reported a $99 million loss for the quarter ended in March, citing one-off expenses related to depreciation, stock-based payments and restructuring.
Perception problems
Still, Klarna has a perceptual problem to overcome. In the US, the company has become synonymous with “buy now, pay later” (BNPL) payment methods. This allows consumers to repay their orders in monthly installments.
In contrast, in Europe, consumers recognize that they can use Klarna to store their deposits and pay things through credit plans, Siemiatkowski pointed out.
He also expressed his dissatisfaction with the kind of meme you can get in the US, such as “Klarna launched on Doordash is a sign of the macroeconomic environment.”
Siemiakowski said this type of reaction would not occur in the German or Scandinavian market.
He sees the future in which Klarna works as a more inclusive financial ecosystem with add-on services such as stocks and cryptocurrency investment capabilities.
“Providing people the ability to invest in both stocks and crypto is becoming a kind of standard part of neobank offering,” he said, but he emphasizes that he doesn’t want to compete with the popular US stock trading app Robin Hood.
When is the Klarna IPO?
Klarna suspended plans to make it public in April after President Donald Trump announced sweeping fees for dozens of countries.
Siemiatkowski said Klarna has already achieved what it is trying to do to prepare for that milestone, that is, to build a brand in the US
“Currently, the US is the largest market by user count. It’s a profitable market for us,” he said. “These things have been achieved.”
Whether the company is public or not, Klarna’s business strategy remains the same.
“It’s a healthy way to promote shareholder liquidity, and if you want to do that, it’s a way to provide more funding to the company and… to show that this is an established company,” Siemiatkowski said.
See: Why the US doesn’t have a “super app”
