Klarna
Klarna is the world's leading Buy Now, Pay Later provider, founded in Stockholm in 2005 and now operating across 26 countries with 114 million active consumers and over 850,000 merchant partners. It processed $105 billion in gross merchandise volume in 2024 and listed on the New York Stock Exchange in September 2025 in the largest fintech IPO of that year. In Europe, Klarna is the dominant BNPL provider with 82% market share in Germany, 71% across the Nordics, and strong positions in Sweden, the Netherlands, the UK, Austria, and a growing number of additional markets.
Klarna offers merchants several distinct payment products under one integration: Pay in 3 or Pay in 4 for interest-free instalments, Pay in 30 for deferred single payment, and financing options for longer-term instalment plans on higher-value purchases. The merchant receives full payment upfront on all Klarna transactions regardless of which consumer product the buyer selects. Klarna absorbs the consumer credit risk, fraud risk, and chargebacks on standard transactions.
On cost, Klarna charges merchants a percentage fee per transaction typically in the range of 3.29% to 5.99% plus a fixed fee, depending on the market, product, and negotiated terms. These rates are not published and are agreed commercially, which means the rate any given merchant pays is a function of their volume, category, and negotiating position. For merchants processing significant Klarna volume, the fee structure is one of the more important cost lines to review, and the rates are negotiable.
The conversion argument is well established in relevant categories. Klarna is strongest in fashion, beauty, electronics, home and living, and sporting goods, where the ability to pay later meaningfully reduces purchase hesitation on higher ticket items. The commercial case is category and customer-base dependent, and merchants should assess their own Klarna-attributed conversion lift and average order value impact against the per-transaction cost rather than relying on Klarna's own benchmarks.
PSP access is broad. Klarna relaunched its Stripe integration in January 2025, enabling instant activation across 26 markets with no additional code. Integration is also available via Adyen, Worldpay, J.P. Morgan, and most major European PSPs, as well as direct API integration.
Regulatory context is relevant here. The EU Consumer Credit Directive and UK FCA regulation are both moving to bring BNPL within formal consumer credit frameworks, adding compliance obligations for both providers and merchants. For merchants with Klarna in their checkout, staying current on how these regulatory changes affect their responsibilities is prudent.
Relevant markets: 26 countries, with strongest penetration in Germany, Sweden, Netherlands, Norway, Finland, Denmark, Austria, UK, and US
