Retailers Use Big Data to Turn You Into a Big Spender

Online shoppers often fill up their carts and bail at the last minute when the bill comes. Usually it’s because they can’t remember their log-in, don’t have their wallets handy or can’t bear to fill out a credit-card form. A Swedish startup called Klarna has discovered a way to get people to complete more purchases over the Internet: Don’t ask for money up front.

Klarna uses a sort of honor system, requiring customers to enter only their name, shipping address and e-mail account, where they’ll receive a message with instructions on how to pay. There’s also a printed invoice inside the box when their purchase arrives. Customers have two weeks to settle up by entering their credit card or bank account number or by setting up an installment plan.