Klarna

Klarna is a Swedish ecommerce payment solutions provider and regulated bank with an extensive BNPL product among its offerings. Klarna offers many financing options, allowing users to split purchases into four biweekly installments, pay 30 days after the transaction, and use long-term (6-36 month) financing. In addition to its retailer integrations, Klarna allows users in select markets to shop directly within its app and convert purchases into monthly installments, whether they’re partnered with Klarna or not. The app, which was initially tested in the UK and a few other markets since June 2021, is available in over 20 countries including the US, Australia, Germany and Romania . It also launched physical BNPL cards in the UK and US in 2022. In February 2023, Klarna introduced late fees for missing payments for customers in the UK. 

The company embedded various additional features such as a personalized shopping assistant, creator support tools, resell functionality and a shopping feed in April 2023, followed this with the release of a credit opt out feature in May 2023 and Klarna Plus in January 2024. Klarna launched open banking-powered settlements in the UK in March 2024, allowing users to make payments directly via their bank accounts. The company launched Klarna Balance and Cashback, in 12 countries across Europe and the US in August 2024. Klarna Balance allows users to store money in a Klarna account and use it for purchases or installment payments, receive cash-back rewards for shopping in the Klarna app, or receive refunds for returned items. Cashback rewards users for purchases made through its app, with up to 10% cashback at participating retailers.

The company generates revenue through merchant fees on each customer transaction, interest, and late fees. For its installment financing, known as “Pay in 4,” Klarna does not charge interest, but late payment fees are applicable (the lesser of USD 7 or 25% of the installment). For long-term financing, it charges interest at 19.99% APR and late payment fees of up to USD 35.

Klarna has been active in the M&A space, having made multiple acquisitions in the retail finance segment. In 2017 and 2018, it acquired German-based payments company BillPay and UK-based Close Brothers Retail Finance to expand its customer offering in the respective markets. Furthermore, it acquired Italian BNPL startup Moneymour in February 2020 to establish a product development hub in Milan in which Moneymour’s IP and workforce fully integrated with Klarna after the acquisition. In April 2022, Klarna acquired PriceRunner, a price comparison service provider and trained its data for the development and launch of an AI-powered image recognition tool for its app in October 2023, that allowed users to find similar products by scanning items with their phones. Klarna sold its online checkout solution, Klarna Checkout (KCO), to a group of investors led by Kamjar Hajabdolahi (CEO of BLQ Invest) for USD 520 million, in June 2024. Klarna acquired the assets of Laybuy, a New Zealand-based BNPL provider, for an undisclosed sum in August 2024. Klarna planned to relaunch the Laybuy brand in New Zealand and leverage its expertise and global presence to enhance payment flexibility for New Zealand consumers and merchants.

In FY2022, Klarna gross merchandise volume (GMV) grew 22% YoY to SEK 837 billion (approx. USD 83 billion) supported by more than 150 million global active customers. It also reported over 500,000 global retail partners across 45 countries. The growth in GMV was driven by momentum in the US market—revealed as its fastest-growing market and largest by revenue. Klarna reported over 34 million US consumers, with a 71% YoY growth in GMV. However, Klarna’s adjusted non-IFRS operating losses grew to SEK 8 billion (~USD 0.8 billion) driven by rising net credit losses and a dampened macroeconomic environment.

Key customers and partnerships

In November 2023, Klarna partnered with Form3 , to utilize Form3’s extensive payment processing capabilities supporting European transactions and payments. In September 2023, Klarna partnered with UK-based APEXX Global , an API-based payment infrastructure provider, to leverage APEXX’s list of clients and grow its platform’s reach within the travel sector. In May 2023, Klarna partnered with AirBnB to facilitate AirBnB users with flexible payment options for bookings within the US and Canada. In April 2023, Klarna entered into a partnership with UK-based OnBuy to integrate its BNPL offering on OnBuy’s virtual marketplace featuring over 35 million products which allows Klarna to increase its product reach further across the UK. Klarna partnered with payment acceptance solutions company Ingenico (January 2023), to allow for the use of the company's flexible payment options at the point of sale using Ingenico’s Payments Platform as a Service (PPaaS). This was followed by Klarna’s partnership with card issuing platform Marqeta in June 2022 , to launch its physical Visa card in the US.

In October 2021, Klarna entered a multi-year partnership and national strategic alliance with Simon Property Group (Simon) to offer BNPL solutions to shoppers in Simon’s retail developments. Similarly, it entered into an exclusive multi-year partnership with global real estate developer and operator, Brookfield Properties. The deal extended Klarna’s payment plans to more than 150 shopping centers in the US.