September 28, 2017In the past several years, online commerce has provided fertile ground for the proliferation of the subscription model. Just about any type of digital or physical product is now available on a subscription basis with payment providers enabling merchants to offer these goods via automatically recurring payments. In Los Angeles this week, Swedish payments provider Klarna, in an effort to expand its growing U.S. presence, unveiled a partnership with top golf-equipment brand TaylorMade that combines subscriptions and instant financing. Drawing inspiration from smartphone manufacturers that have moved to an upgrade model, Jim Lofgren, CEO of Klarna North America said the company is enabling consumers that purchase golf equipment on TaylorMade’s e-commerce site to instantly finance the purchase over 18 or 30 months. Near the end of the payment period, the consumer is given the opportunity to upgrade and a new course of payments begins. While the company did not announce it at Shop.org, Lofgren told CardNotPresent.com Klarna has established a similar program with Microsoft and is seeking to apply the model to other merchant verticals. For merchants, Lofgren said the most significant impact is on conversion. Before the official announcement on Tuesday, TaylorMade tested the concept with Klarna over several months and claims the subscription/financing/upgrade model lifted conversions 30 percent on its site along with a 5 percent increase in average order value.