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Apple Pay Later won't affect us for years: Klarna CEO

Klarna’s CEO Sebastian Siemiatkowski is not worried about competition with Apple. The tech giant introduced its buy now pay later offering, Apple Pay Later, in March but Siemiatkowski doesn't feel the pressure just yet. He joined Yahoo Finance to discuss the growing buy now pay later space.

Siemiatkowski said he loves Apple (AAPL) Pay, but it hasn’t caught up to Klarna yet, “there’s so many limitations that it will take years before this product has any potential significant impact on what we’re doing.”

When it comes to other major companies in the space, Siemiatkowski said that in his 18 years in the business Klarna has stayed competitive. “First it was like Paypal (PYPL) is too big and they were going to kill us in the Nordics and they were going to kill us in the German speaking countries, and then they were going to kill us in the UK and here we are now killing them in the U.S.,” he said.

Where Siemiatkowski is worried about competition is startups, not tech giants. “It's the startups and the new people coming with new, great ideas moving at super slight speed. Those are the ones you should be worried about as a company,” he said.

Watch the full interview with Seana Smith and Dave Briggs here.

Key video moments:

00:00:09 On Paypal

00:00:27 On Apple Pay Later

00:02:18 On startups

Video Transcript

DAVE BRIGGS: So the consumer is strong and so, too, is the competition. Apple getting in your space. What's your reaction?

SEBASTIAN SIEMIATKOWSKI: I don't know. You know, I've been in this-- I've been doing this for 18 years. First, it was like PayPal was too big, and they were going to kill us in the Nordics, and then they were going to kill us in the German-speaking countries, and then they were going to kill us in the UK. And here we are beating them in the US.

I don't know. Like, I just-- I think-- I don't want to be arrogant to big companies' abilities to be competitive, but they're also-- if you look at Buy Now, Pay Later, with Apple right now and Apple Pay Later, it's actually-- while, obviously, I love Apple Pay-- in store, it works amazingly well. But if you look at the top 100 US retailers, more people offer Klarna now, those in the US, than offer Apple Pay.

I'm not talking about Apple Pay Later. In order to use Apple Pay Later, you Also have to sign up for it. It only works on Safari. It doesn't work in Chrome. It only works on an iPhone. It doesn't work on your desktop. I mean, there's so many limitations that it will take years before this product has any potential significant impact on what we're doing.

And to us, Buy Now, Pay Later, is just a feature. I think the strongest and most fantastic thing about Klarna is on every transaction we process, we carry SKU level data. When you shop with us at Macy's, we can show you not only that you bought for $100, exactly images of the items that you bought and the sizes, and the colors.

And in this AI-powered world that we're going, this data and the fact that consumers are sharing this data with us is creating fantastic opportunities to match consumers to new brands, to new businesses and providing them an even better way to save money, save time, make them less worried about their finances. So it's like, I think that the-- that's really the key thing that media misses on Klarna is SKU level data.

There's no other network out there-- Visa, Mastercard, none of them has this network on the rails, and that's creating for us unique opportunity. Buy Now, Pay Later, is a fantastic feature. It's grown a lot of interest. But for me, Klarna is so much more than that. And if Apple Pay Later becomes the buy-now, pay-later offer, sure, fine. But that doesn't solve that Apple doesn't have access to SKU level.

SEANA SMITH: All right, Sebastian. Actually, that's a pretty good answer because I would have thought that maybe you would have been a little bit worried if a tech giant like Apple was encroaching a little bit into your space. But let's talk about--

SEBASTIAN SIEMIATKOWSKI: I'm worried about startups. I think you have to be worried about startups. They're the one you should be careful about. The big companies are the big companies. It's the startups, the new people coming with new great ideas moving at super lightspeed. Those are the ones you should be worried about as a company.

SEANA SMITH: Good.

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