Klarna uses AWS cloud as it moves from startup to global fintech force

Swedish fintech cements its relationship with Amazon Web Services to speed up product development and support its global expansion

Swedish financial technology (fintech) company Klarna is to use the Amazon Web Services (AWS) cloud for product development as it expands across the globe. The agreement cements a relationship that has existed for more than a decade.

Klarna started life in 2005 as an online payments provider before offering wider banking services. It now operates in 17 countries, including the Nordic nations, Germany, Austria, the Netherlands, Switzerland, Belgium, the UK, Italy, Spain, Poland and the US, and has about 2,700 staff.

The company started off by handling online retailers’ credit risks and allowing consumers to pay for their online shopping after receiving the goods. It later expanded, using various payment methods for e-commerce.

Today it offers merchants functionality that they can, in turn, offer to their customers when paying for products and services. This includes paying for goods in instalments with no interest charge, for example.

In 2017, Klarna was granted a full banking licence by Finansinspektionen, Sweden’s financial supervisory authority.

This has enabled the fintech to grow its customer base and product portfolio. It now has 60 million end-customers using its services to buy from 170,000 merchants, including Adidas, ASOS, Nike, IKEA and H&M. Its merchant customer base has increased rapidly, with about 100,000 merchant users added in the last two and a half years.

The AWS cloud will provide the on-demand computing resources required to support this rapid expansion, enabling Klarna to launch new products quickly.

“Together with AWS, we share a relentless focus on providing choices to consumers, so they no longer have to settle for the status quo,” said Koen Koppen, CTO of Klarna. “Our collaboration with AWS has helped us to rapidly innovate and create new services and applications that customers want, in a secure and seamless way.”

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Klarna recently launched a platform that enables consumers to buy items from any merchant and pay later in four equal instalments, with zero interest and fees. It has also developed an open banking platform for e-commerce providers and authentication service for users.

As part of its development in the AWS cloud, the company has developed a microservices architecture and is planning to use AWS’s machine learning tools.

Traditional financial services firms are gradually moving into the cloud, with AWS itself having customers such as Goldman Sachs and Barclays Bank. But it is the banking challengers, known as fintechs, that are showing them the way. Klarna’s rapid evolution and growth is evidence of the advantages of on-demand cloud services from the likes of AWS.

The cloud has enabled these challengers to transition rapidly from idea to regulated finance provider, creating products and services quickly through cloud development in a safe and regulated environment.

Klarna, an early fintech, has caught the eye of acquisitive companies in the tech and payments sector. It is expected to attract particular attention from emerging paytech players, such as Apple, Facebook, PayPal and Google, all of which are growing their footprint and looking for acquisition opportunities in the Nordics.

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