Klarna’s new distribution partnership with Stripe will make the Swedish fintech’s buy now, pay later service available as a payment option for merchants using Stripe in 26 countries. As Klarna prepares for its IPO, this alliance underscores the company’s commitment to BNPL, which remains the cornerstone of its growth strategy.
The partnership significantly builds on their initial collaboration, established in 2021, which allowed Stripe’s U.S. merchants to offer Klarna’s BNPL services.
One promising feature of the expanded partnership is the ability for Stripe’s merchants to perform A/B tests on Klarna products in real-time. This capability allows them to instantly see the incremental revenue gains that Klarna and BNPL bring to their business. According to Stripe’s research, offering BNPL services has increased revenue for merchants by 14% through improved conversion rates and higher average order values.
Klarna filed for its IPO in November 2024 and aims to present the strongest possible numbers to the market. Alongside its partnership with Stripe, Klarna added 100,000 new merchants to its platform in 2024, gaining access to 85 million active users across various markets.
Klarna has made several forays into diversification. In October 2024, it teamed up with Worldpay to provide streamlined payments integration for merchants worldwide. Additionally, it introduced Klarna balance, which lets users store money in a personal account for instant purchases and to pay off BNPL loans, signaling the fintech’s aspirations to evolve into a retail bank.
Growth Opportunities
BNPL remains the core of Klarna’s business. Interest-free BNPL products and longer-term financing options account for more than two-thirds of Klarna’s transactions, and this offering continues to grow by leaps and bounds. What’s more, this growth aligns with the broader global trend: BNPL transaction volumes continue to rise across the industry.
Indeed, a report from ACI Worldwide forecast a 237% increase in global transaction volumes for BNPL services in 2024.
Further supporting the rising popularity of BNPL, research has shown its impact on consumer spending behavior. An article last year in the Journal of Marketing analyzed the purchasing patterns of 75,000 consumers who adopted BNPL alongside 200,000 non-adopters. It found that BNPL users were 9% more likely to make a purchase and spent 10% more per transaction, highlighting the positive effect BNPL has on driving higher purchase volumes.
