how would you define the success of klarna's interest-free installment payments?

Introduction

Defining the success of Klarna's interest-free installment payments requires a comprehensive approach that considers multiple stakeholders and metrics. To address this product success metrics challenge effectively, I'll follow a structured framework covering core metrics, supporting indicators, and risk factors while considering all key stakeholders.

Step 1

Product Context

Klarna's interest-free installment payments allow consumers to split the cost of purchases into multiple payments without incurring interest. This feature is part of Klarna's broader "buy now, pay later" (BNPL) offering, which aims to provide flexible payment options for online and in-store shoppers.

Key stakeholders include:

1. Consumers: Seeking flexible payment options without additional costs
2. Merchants: Looking to increase sales and average order value
3. Klarna: Aiming to grow user base, transaction volume, and revenue
4. Regulators: Ensuring consumer protection and financial stability

User flow:

1. Shopper selects Klarna at checkout
2. Klarna performs a soft credit check
3. If approved, the shopper completes the purchase and sets up their installment plan
4. Klarna pays the merchant in full
5. The shopper repays Klarna in installments

This feature aligns with Klarna's strategy to become a global retail bank by offering innovative financial products. Compared to competitors like Affirm or Afterpay, Klarna's interest-free option stands out by not charging interest or fees for on-time payments.

Product Lifecycle Stage: Growth - Klarna's BNPL services are rapidly expanding globally, but still face competition and regulatory challenges in some markets.