Pink standard

Setting the standard for sustainable payments at Klarna

Industry
Fintech
Company
Klarna
Role
Sr Product Designer
Summary
  • Project goal: Set higher standards to specific payment methods like the pay later, monthly invoice and pay in parts to get even closer to consumers' needs.
  • Motivation: Due to the fact that people weren't able to pay in time, Klarna decided to improve its payment methods and offerings through the pink standard initiative starting from Sweden and followed by Finland, Norway and Denmark.
  • My role and the team: Senior product designer in a team 1 product manager, 1 data analyst and 3 engineers. Also, supporting another group (responsible for Pay later and monthly invoice).
  • Activities and tools: Requirements and analysis, design strategy, wireframing, high fidelity designs & prototyping, collaboration and workshops with different teams.
  • Results: Launched this initiative to a total of +3K merchants in 4 different markets.
  • Project duration: 3 months.
Klarna and the pink standard initiative

Klarna decided to set the standard for sustainable payments called "Pink standard" in the Nordics. With this initiative, we were striving to position Klarna as the number 1 consumer friendly fintech brand in the region.
We do so by enhancing sustainable business practices which means getting rid of unnecessary fees and complexity, be even more transparent and help customers pay on time.

Product changes

We focused on 3 different payment methods (Pay later, Monthly invoice and Pay in parts). On some features and changes other teams were also involved.
We mapped out all these changes below:

  • Pay Later
    1. Late payment interest is removed
    2. Ability to convert into instalments in Klarna app (if consumers are not able to pay on time)
    3. Friendly reminders after due date
    4. Ability to enable/disable automatic payments
    5. 30 days credit time for all merchants (instead of 14)
  • Monthly invoice
    1. Ability to convert into instalments in Klarna app
    2. Ability to enable/disable automatic payments
    3. Pay at the end of the next month
  • Pay in parts (Financing)
    1. Stop nudging for a minimum payment in app and statements (to minimise increasing dept)
    2. 50% decrease of the reminder fees
    3. Remove late payment interest
    4. Interest only pricing without hidden fees (i.e admin fees, etc.)
Localisation and covering different markets

We took care in testing the communication and solution in different markets (with different languages and currencies).

Challenges and understanding customers

The main challenge in designing for a different market is not being physically there. It is difficult to deeply empathize with the customers' needs and motivations. This gap slightly closes with going over research done before. However, main questions like what meaningful features we should add to the current financing purchase flow were raised all the time. With the help of the EU localisation team, we surveyed 2 different user groups: People who use financing products and people who avoid them (In Austria and Germany).

Results and learnings

We successfully launched these changes to 3.200 merchants in 4 different markets (Sweden, Finland, Norway, Denmark). Most users were able to pay more on time with less calls/reports to the customer service.

  • Drop percentage in customer service errands
    Sweden: 18%
    Denmark: 54%
    Finland: 33%
    Norway: 42%
  • Drop percentage in reminder rates
    Sweden: 42%
    Denmark: 46%
    Finland: 44%
    Norway: 43%

By hearing our customers and making informed tiny changes in the product we can provide a tangible and an overall better experience.

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