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Buy Now, Pay Later

Klarna Bank AB, commonly known as Klarna, is a Swedish fintech company offering a wide range of online financial services. Specializing in payment processing for the e-commerce sector, Klarna is recognized for its "buy now, pay later" service, which allows consumers to make purchases online and pay for them at a later date. The company's services also include direct payments, installment plans, credit cards, and more. It is headquartered in Stockholm, Sweden.

Early Days and Concept

The idea for Klarna was conceived in 2005 when the founders, Sebastian Siemiatkowski, Niklas Adalberth, and Victor Jacobsson participated in the Stockholm School of Economics' annual entrepreneurship competition. Although they did not win, they were determined to realize their vision. Klarna's business model was designed around providing payment solutions that allowed consumers to pay for online purchases after receiving the goods, thus addressing the trust issues prevalent in e-commerce transactions at the time. Today, Klarna is a very popular payment provider and has partnered with services such as Shopify and Adyen, while also providing its services to retailers and other e-commerce companies.

Further reading: Klarna's Potential 2024 IPO: From Sequoia to Wall Street

Klarna's Main Offerings Include:

  • Pay Later: Klarna allows consumers to order products online and pay for them after delivery. The typical period for payment after delivery is 14 to 30 days, depending on the merchant's policy.

  • Pay Now: For consumers who prefer to pay for their purchases immediately, Klarna offers direct payments through bank transfer or card payments.

  • Installment Payments: Klarna also provides options for consumers to spread the cost of their purchases over time. This can be done through monthly installments, allowing buyers to manage their finances more flexibly without incurring interest or additional fees if payments are made on time.

  • Financial Services: Beyond payment solutions, Klarna offers a range of financial services, including credit card and savings accounts in some markets.

  • Merchant Services: For merchants, Klarna provides a suite of services designed to increase sales and customer loyalty. These include payment processing, acquisition and retention tools, and insights into customer behavior.

Klarna's Key Markets

Klarna has a strong presence in Europe, serving countries such as Sweden (where it is headquartered), Norway, Denmark, Finland, Germany, Austria, the Netherlands, Belgium, the United Kingdom, France, Spain, Italy, Portugal, Poland, and more. Europe is Klarna's largest market, but the company is also active in North America and Australia.