Hidden fees and limited payment options have often been a large hurdle which has hindered the amount of credit payments being made to small businesses. Firms using the business platform, Xero can now add ‘buy now pay later’ (BNPL) to their offering as it partners with Klarna, the AI-powered global payments network.
Xero’s customers will now be able to offer alternative payment methods to traditional credit using Klarna. This will enable the firms to get paid upfront when their consumers don’t have sufficient funds, without having to worry about high interest rates or hidden fees. Klarna won’t be available to Xero customers in Australia.
Bharathi Ramavarjula, SVP of payments at Xero
Bharathi Ramavarjula, SVP payments and ecosystem at Xero said: “We know that maintaining a healthy cash flow is critical to a successful business, and offering more ways to pay supports increased business growth and getting paid faster.
“In fact, our recent research report shows that if a business doesn’t offer customers their preferred way to pay, they are prepared to take their business elsewhere. By enabling our customers with more ways to pay, including Klarna, we can help them retain customers and increase their revenue.”
Alternative to credit
Klarna offers an alternative to credit cards with strong guardrails which enable responsible spending. Klarna checks a consumer’s eligibility before approving each purchase and provides a clear instalment plan with friendly reminders to help shoppers keep on top of their payments. These guardrails mean 99 per cent of lending is repaid and 40 per cent of orders are repaid early.
David Sykes, chief commercial officer, at Klarna
David Sykes, chief commercial officer, at Klarna says: “Klarna’s flexible payment options are typically associated with clothes and shoes but that has been changing for a long time. This partnership brings Klarna’s flexible payment options to micro businesses of all kinds so business owners can get paid on time and their customers can choose how and when to pay.
“This includes businesses where gardeners and landscaping services using Xero can now offer a Klarna BNPL payment option, plumbers and heating engineers using Xero can fix their customers’ boilers and let them spread the cost while small businesses involved in the construction industry could spread the cost of smaller projects over three interest-free installments.”
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