Fashion chain H&M has acquired a stake worth $20m in Swedish online payments firm Klarna.

The deal is said to offer H&M a stake of less than 1% in the payments start-up.

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Under the alliance, Klarna’s platform will be used to make payments at physical and digital stores of H&M.

Through its platform, Klarna aims to integrate H&M’s in-store, online and mobile payments.

Retail stores tapping into payments

Furthermore, the payments startup intends to enhance the retailer’s process of deliveries and returns. Moreover, it will offer flexible payment options including the ‘try before you buy’ Pay later service.

H&M group head of business development Daniel Claesson said: “This partnership will bring tailormade payment solutions to our customers and accommodate evolving shopping patterns and needs.

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“This includes the possibility to “try before you buy” which is very relevant to online fashion retail today and to pay with their mobile phone directly through the H&M app both instore and online.”

The partnership will cover 14 H&M markets. The first phase of the alliance will go live next year, starting from the UK and Sweden.

Klarna CEO and co-founder Sebastian Siemiatkowski said: “Customers will no longer be forgiving of unnecessary complexity or when their retail experience does not leverage the insight available to make their engagement smart, personal and easy.

“This partnership is rooted in a shared obsession about just how good that shopping experience should be. Together we have worked hard on developing a unique solution for instore and online. It will delight customers, drive economic value and build loyalty.”