News, Education and Events Decoding Digital Payments & Fraud

News, Education and Events Decoding Digital Payments & Fraud

Q&A: Raj Karkara of Talks Payment Innovation

Q&A: Raj Karkara of Talks Payment Innovation

By D.J. Murphy, Editor-in-Chief,

Q&A: Raj Karkara of Talks Payment Innovation Last month, Salt Lake City-based online retailer became the first merchant in the U.S. to integrate a Swedish online payment provider that had been making waves first in its native Scandinavia and, more recently, across Western Europe. Klarna is an online payment method focused on conversion that enables consumers to make online purchases using an email address or a ZIP code and to complete transactions after receiving their goods. Klarna pays the retailer and assumes the transaction risk. It is widely viewed as an innovative way to pay for things online.

The announcement was important for Klarna as a first step toward eventual success in the U.S. What it says about, however, is somewhat different. Nearly two years ago, as the wider world was just learning about a new, anonymous way to pay for things online called Bitcoin, became the first major e-commerce Website in the world to accept the digital currency.

An often-paraphrased saying states: “Once is an accident, twice is a coincidence, three times is a trend.” While it may not be a trend yet, Overstock is well on its way to establishing an identity as a retailer willing to take chances with innovative payment methods that might scare others. And, according to Raj Karkara, senior director of OLabs (’s incubator for new businesses, new markets and new product development), the company has its eyes wide open to spot the next innovation that can make it easier for their customers to pay and cement payment innovation as a central part of its culture.

In a recent email conversation, Karkara answered questions from about online payments and the role innovation plays when choosing them. When people think of innovation they aren’t thinking about how they pay for things. has been first to roll out two online payment methods that U.S. consumers have never seen. When and why did it become important for your company to look at payments the way others look at product?

Raj Karkara: Payment methods are usually not the first thought when shopping online, but are in the center of all transactions.  Our goal is to provide options and to make it easier for consumers to transact online with any of those payment methods.  In the past two years, we have been the first retailer to accept Bitcoin, we started our own store credit card and have adopted Klarna.  Klarna is a European payment solution that, through their partnership with Overstock, just entered the U.S. market, bringing innovative solutions such as pay after delivery. Why does the U.S. seem to follow other countries around the world when it comes to payment innovations? It doesn’t lead in mobile payments and many alternative online payment methods are rooted in other places.

RK: The U.S. payment ecosystem has been around for a long time, and our consumers and merchants are used to doing things a certain way.  I don’t fully agree that we follow other countries regarding payment innovation—big companies such as PayPal and Square were started here.  Other markets are innovating in providing payment solutions with enhanced consumer experiences, and at Overstock we embrace such innovation. What characteristics does a true innovation in payments exhibit?

RK: Innovative payment solutions today exhibit not only acceptance, security and fraud protection, but are also optimized for providing the best consumer and user experience regardless of the device they are using to shop. Are there similarities between Bitcoin and Klarna that led Overstock to select them (as opposed to others) as alternative payment methods for U.S. consumers?

RK: No, not really. We review all new technology, and then choose those we feel are the best for our customers. Is it more important that consumers adopt them in a significant way or that Overstock was first to offer them?

RK: Our goal is to be ahead of the curve and offer new solutions to consumers in order to provide them with value while saving them time. If we do that correctly, consumers respond. It seems people are concentrating recently on non-payment ways to leverage the blockchain and that the buzz around Bitcoin as an online payment method has waned. Are you still bullish on consumers adopting Bitcoin to pay for things?

RK: Bitcoin as a currency will remain chiefly in the realm of early adopters for a while. What will help usher it into the mainstream is the spread and acceptance of alternate uses of the blockchain. Once people become familiar and comfortable with the blockchain in lower-consequence transactions, they will see the value of it as a means of value exchange. This will take a few years.  In the meantime, will continue to accept Bitcoin as a payment method.  Additionally, Overstock just announced its new digital trading platform subsidiary,, which records securities trades through the blockchain. How much of your overall sales are transacted using Bitcoin?

RK: Very little in regards to overall sales; along the lines of 0.02 percent . Do you expect more consumers to use Klarna than bitcoin?

RK: Yes. Already, Klarna transactions dwarf Bitcoin transactions. How does Overstock search for innovations in payments?

RK: We actively keep track of consumer payments across the world. What is the most challenging problem in online payments for merchants right now and what innovative products hold the most promise to solve it?

RK: With the rollout of Chip-and-PIN cards, fraud has historically shifted online when this technology was adapted in other markets.  We think Klarna is a solution that not only provides great consumer experience, but also helps reduce overall fraud for consumers and fraud liability for merchants as it takes on the liability for transactions it processes.

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Daniel Leibovitch