Klarna Provider Profile: The Buy Now, Pay Later Leader
Europe's leading BNPL provider with 150M+ consumers and 500K+ merchant partners across 45 countries.
Klarna is a Swedish fintech company founded in 2005. It is the dominant force in global Buy Now, Pay Later (BNPL) services, serving over 150 million active consumers and 500,000 merchant partners across 45 countries, particularly in Europe and North America. For merchants evaluating Klarna, the key advantage is the combination of higher average order value (AOV) lifts — typically 40–60% — and the transfer of all consumer credit risk to Klarna.
Key Features
- Pay in 4: Split purchases into four interest-free installments, charged automatically every two weeks
- Pay in 30 Days: No upfront payment required; consumers pay invoice balance after 30 days
- Financing: Structured monthly payment plans for high-value items, spanning 6 to 36 months
- Klarna App: A shopping destination that drives customer traffic directly to partner merchants
Technical Specifications
| Parameter | Details |
|---|---|
| Geographic Coverage | 45 countries, with primary strength in EU and US |
| Merchant Integration | Direct API, Stripe, Adyen, Shopify, WooCommerce |
| Merchant Fees | Typically ranges from 3.29% to 5.99% + $0.30 per transaction |
| Underwriting | Done in real-time by Klarna using proprietary algorithms |
| Consumer Credit Risk | Assumed entirely by Klarna — merchant paid upfront |
| AOV Impact | Typical increase of 40–60% when Klarna is offered |
Klarna vs Afterpay vs Affirm
| Feature | Klarna | Afterpay | Affirm |
|---|---|---|---|
| Primary Market | Europe + US | US, AU, UK | US, Canada |
| Payment Options | Pay in 4, Pay in 30, Financing | Pay in 4, Monthly | Pay in 4, Pay Monthly (6–60 mo) |
| Merchant Fee Range | 3.29–5.99% + $0.30 | 4.0–6.0% + $0.30 | 2–6% (varies by term) |
| AOV Lift | 40–60% | 20–30% | 30–50% |
| Invoice (Pay Later) | Yes (30 days) | No | No |
| Best For | Fashion, retail, European expansion | US fashion, Gen Z | Higher-ticket items ($100+) |
Pros and Cons
Pros
- Higher Order Value: Average order value (AOV) typically increases by 40–60% when Klarna is introduced — the highest AOV lift among BNPL providers.
- Risk Shielding: Klarna assumes all customer default and fraud risks, paying the merchant upfront.
- Customer Acquisition: Drive new users from the Klarna shopping ecosystem (150M+ active consumers).
- Invoice option: Pay in 30 Days is a unique differentiator that resonates strongly with European consumers.
Cons
- Higher Merchant Fees: Significantly more expensive than standard credit card processing (3.29–5.99% vs 1.5–2.5%).
- Regulatory Scrutiny: Increasing government regulation of BNPL credit products across multiple jurisdictions.
- Brand Separation: Customer relationship is partially transferred to Klarna's mobile app, reducing direct merchant-customer interaction.
Klarna in the UK
Klarna is one of the largest BNPL providers in the United Kingdom, where Clearpay (Afterpay's UK brand) is its primary competitor. For UK merchants evaluating BNPL checkout options, the Klarna vs Afterpay decision depends on audience demographics and transaction volume. See our full Klarna vs Afterpay comparison for a detailed breakdown.
Klarna in the US
Klarna is one of the largest BNPL providers in the United States, offering Pay in 4, Pay in 30 Days, and longer-term financing. US BNPL adoption is accelerating as younger consumers seek alternatives to traditional credit cards. For US merchants evaluating BNPL options, see our full guide to US payment methods and our Klarna vs Afterpay comparison.
FAQ
What is Klarna?
Klarna is a Swedish fintech company and the world's largest Buy Now, Pay Later (BNPL) provider. It serves over 150 million active consumers across 45 countries, offering Pay in 4 (interest-free installments), Pay in 30 Days (invoice), and longer-term financing. For merchants, Klarna assumes all consumer credit risk and pays the merchant upfront.
How much does Klarna cost for merchants?
Klarna charges merchants between 3.29% and 5.99% per transaction plus a $0.30 fixed fee, depending on the payment product, region, and transaction volume. This is higher than standard credit card processing but offset by the 40–60% AOV lift and the transfer of all consumer credit risk to Klarna.
Does Klarna work in the US?
Yes. Klarna operates in the US offering Pay in 4, Pay in 30 Days, and longer-term financing. US BNPL adoption is accelerating, particularly among younger consumers. Klarna integrates with Shopify, WooCommerce, Stripe, and Adyen for US merchants.
References
- Klarna — Merchant Solutions: klarna.com/business
- Klarna — What is Klarna: klarna.com
- Klarna — Investor Relations: klarna.com/press