The buy now, pay later group Klarna is using an AI-powered chatbot to handle two thirds of its customer service inquiries, doing the equivalent work of 700 full-time agents.

The Swedish fintech, which has 150 million customers worldwide, collaborated with OpenAI to build the AI assistant for customer service chats on its app.

In the first month the bot has had 2.3 million conversations, with Klarna estimating that it will drive a $40 million profit improvement this year.

Sebastian Siemiatkowski, co-founder and chief executive of Klarna, said: “This AI breakthrough in customer interaction means superior experiences for our customers at better prices, more interesting challenges for our employees and better returns for our investors.

“We are incredibly excited about this launch, but it also underscores the profound impact on society that AI will have. We want to re-emphasise and encourage society and politicians to consider this carefully and believe a considerate, informed and steady stewardship will be critical to navigate through this transformation of our societies.”

Customers can still choose to interact with live agents if they prefer and Klarna added that it would not lead to any layoffs, highlighting that it expanded its partnerships with third-party customer service providers last year.

The potential impact of artificial intelligence on job security has caused concern in some sectors. In September last year the chief executive at BT said that about 10,000 roles would be cut as Britain’s biggest telecoms group increasingly adopts automation and digitisation from new technologies.

Klarna said that the chatbot was on the same level as human agents on customer satisfaction but much faster, solving a typical request in less than two minutes, compared with 11 minutes needed previously. It also provided more accurate resolution, leading to a 25 per cent drop in repeat inquiries.

The AI assistant can handle queries including refunds, returns, payment-related issues, cancellations, disputes and invoice inaccuracies. It can speak 35 different languages and is available in 23 countries.

Brad Lightcap, chief operating officer at OpenAI, said: “Klarna is at the very forefront among our partners in AI adoption and practical application. Together we are unlocking the vast potential for AI to boost productivity and improve our day-to-day lives.”

● Klarna is moving forward with plans for a potential stock market flotation in the United States that could be one of the largest listings this year, according to Bloomberg. The company is considering seeking a valuation of about $20 billion and discussions on details such as timings and valuation are continuing. Klarna declined to comment.