Klarna Business Model: A Comprehensive Review

Klarna, the leading financial technology company, has revolutionized the way we shop and pay for products online. With its innovative payment solutions and business model, Klarna has transformed the e-commerce landscape, enhancing the customer experience and driving the growth of digital payments in the retail industry.

Founded in Stockholm in 2005, Klarna introduced the concept of “Buy Now, Pay Later,” allowing customers to make purchases without immediate payment. This convenient option has gained immense popularity among online shoppers, enabling them to shop without financial constraints.

Klarna’s business model is built on providing seamless and secure payment solutions, empowering consumers to manage their finances effectively. Through its platform, Klarna offers a range of financial services, making online shopping hassle-free and enjoyable for customers around the world.

Key Takeaways:

  • Klarna’s “Buy Now, Pay Later” business model has transformed the online shopping experience.
  • Payment solutions provided by Klarna enhance customer convenience and flexibility.
  • Klarna offers financial services that empower consumers in managing their finances effectively.
  • The retail industry has benefited from Klarna’s digital payments and improved customer experience.
  • Klarna’s innovative business model aligns with evolving consumer trends and preferences in e-commerce.

The Origin and Growth of Klarna

Klarna, a prominent financial technology company, traces its roots back to 2005 when it was founded in Stockholm, Sweden. The company was established by Sebastian Siemiatkowski, Niklas Adalberth, and Victor Jacobsson, driven by their vision to revolutionize online transactions and simplify the payment process.

The concept for Klarna initially emerged when Siemiatkowski pitched the idea during a competition. Despite facing initial rejection, the founders persevered and secured the support of an angel investor. This pivotal moment marked the beginning of Klarna’s journey toward becoming a leading player in the fintech industry.

Since its inception, Klarna has experienced rapid growth and expansion. The company now operates on a global scale, facilitating millions of online transactions and revolutionizing the way people shop and make payments. Klarna’s commitment to offering secure and convenient payment solutions has propelled its growth and established its position as a trusted leader in the financial technology sector.

Klarna Founders:

Sebastian SiemiatkowskiCo-Founder and CEO
Niklas AdalberthCo-Founder
Victor JacobssonCo-Founder

Klarna’s Mission and Vision

Klarna Bank AB, a prominent financial technology company, is guided by a compelling mission and vision statement that sets the foundation for its business operations and strategic direction. The company’s mission is to make payments simple, safe, and smooth for its customers, revolutionizing the way people shop and transact online.

At the heart of Klarna’s mission lies a commitment to customer empowerment. By transferring power from large corporations to the customers themselves, Klarna aims to create a more inclusive and user-centric financial ecosystem. Through its innovative payment solutions, Klarna provides consumers with the tools and flexibility to manage their finances effectively, empowering them to make fast and informed decisions when it comes to their purchases.

To achieve its mission, Klarna envisions a future where consumers have the ability to seamlessly navigate the world of digital payments. With a relentless focus on customer empowerment, Klarna strives to revolutionize the payment landscape by offering a range of safe, secure, and user-friendly options. By staying at the forefront of technological advancements and customer-centric innovation, Klarna aims to disrupt traditional payment systems and enhance the overall customer experience.

Make payments simple, safe, and smooth for customersEnable consumers to make fast and informed decisions, providing them with tools and flexibility to manage their finances effectively
Transfer power from large corporations to customersCreate a future where consumers have seamless access to digital payments

Klarna’s mission and vision are central to its core business philosophy and guide the company’s strategic decisions, product development, and commitment to customer-centricity. By placing customer empowerment at the forefront, Klarna strives to reshape the future of payments and drive positive change in the financial industry.

The Klarna Business Model – Revenue Streams

Klarna generates revenue through four main income streams:

  1. Merchant Commissions: Klarna charges retailers a flat transaction fee and a percentage of the total sale cost for using its services. This enables merchants to offer Klarna’s payment solutions to their customers and benefit from enhanced conversion rates and customer satisfaction.
  2. In-Store Klarna Card Transactions: Klarna offers a virtual card that customers can use to make purchases at affiliated brick-and-mortar retail stores. This expands Klarna’s reach beyond online transactions and provides additional revenue opportunities.
  3. Interest Charges: For larger purchases, Klarna provides financing options that allow customers to pay in installments. Klarna charges interest fees on these financing options, generating revenue from the interest payments made by customers.
  4. Late Payment Fees: Klarna imposes late payment fees on customers who miss their payment deadlines. These fees contribute to Klarna’s revenue when customers fail to make timely payments and continue to accumulate late payment charges each month.

With these diverse revenue streams, Klarna has established a sustainable business model that aligns its success with the financial transactions and experiences of its customers.

Klarna’s Offerings – Customer Segments and Value Propositions

Klarna caters to two primary customer segments – consumers and merchants. By understanding the unique needs of these segments, Klarna has developed value propositions that address their pain points and drive growth.

For Consumers:

Consumers benefit from Klarna’s offerings in several ways:

  • Convenience: Klarna’s convenient payment options allow customers to make purchases without the immediate need for payment. This flexibility enhances the shopping experience and gives consumers more control over their finances.
  • Performance: Klarna offers a seamless one-click checkout process, reducing friction during online transactions. This streamlined experience improves conversion rates and enhances customer satisfaction.
  • Risk Reduction: Klarna’s features, such as Pay After Delivery, provide an added layer of security for consumers. The option to pay after receiving the product reduces the risk of fraud and ensures customer satisfaction.
  • Increased Brand Respect: Joining Klarna’s wide network and leveraging its popularity enhances the brand reputation of the businesses consumers shop with. This association instills trust and confidence in customers.

For Merchants:

Merchants also derive significant value from partnering with Klarna:

  • Convenience: Klarna’s platform offers a range of convenient payment options for merchants’ customers, improving the overall shopping experience. This ease of payment enhances customer satisfaction and loyalty.
  • Performance: Klarna’s solutions contribute to improved conversion rates for merchants. The seamless checkout experience and trusted payment options increase the likelihood of successful transactions.
  • Risk Reduction: Instant payment from Klarna reduces the risk of payment default, providing merchants with greater financial security. This reduction in risk allows businesses to focus on growth and operational efficiency.
  • Increased Brand Respect: By joining Klarna’s network, merchants gain access to a wide customer base and benefit from the credibility and trust associated with the Klarna brand. This association can lead to increased customer acquisition and repeat business.

Through these value propositions, Klarna creates a win-win situation for both consumers and merchants, offering convenience, performance improvements, risk reduction, and increased brand respect.

Klarna’s Channels and Customer Relations

Klarna utilizes a diverse range of channels to serve its customers effectively, combining online and offline platforms. Although the majority of Klarna’s transactions occur online, the company has expanded its presence to offline channels as well.

Online Platforms

Klarna’s online platform serves as the core channel for its customers, providing seamless payment experiences. Customers can easily access Klarna’s services through the website, offering a user-friendly interface for browsing and making purchases.

Additionally, Klarna offers its customers the convenience of using the Klarna Card and App. The Klarna Card provides a virtual payment solution, enabling customers to make purchases at various online retailers. The Klarna App complements the online platform, offering a mobile-friendly interface for customers to manage their payments, track orders, and access exclusive offers.

Offline Platforms

Recognizing the importance of traditional brick-and-mortar retail, Klarna has extended its reach to offline channels. The Klarna Card, available in a physical form, allows customers to make purchases at affiliated retail stores, providing a seamless payment experience in-store.

Building Customer Relations

One of Klarna’s key priorities is cultivating strong customer relationships. The company understands the value of personalized assistance and offers customer support through various channels, ensuring that customers always have access to the help they need.

Customers can reach out to Klarna’s support team through live chat on the website, emails, or phone calls. Klarna also actively engages with customers on social media platforms, leveraging these channels to provide prompt responses and address any inquiries or concerns.

This commitment to customer relations helps Klarna establish trust and loyalty, further enhancing the overall customer experience.

Online Platforms– Website
 – Klarna Card
 – Klarna App
Offline Platforms– Klarna Card (Physical Form)

SWOT Analysis of Klarna Business Model

A SWOT analysis provides valuable insights into the strengths, weaknesses, opportunities, and threats of Klarna’s business model.


  • High demand for Klarna’s services: Klarna’s ‘Buy Now, Pay Later’ model has gained immense popularity among consumers, driving the growth of the platform.
  • Simplified online shopping experience: Klarna’s seamless and convenient payment solutions enhance the overall customer experience, resulting in increased customer satisfaction and loyalty.
  • Strong risk protection: Klarna offers comprehensive risk protection measures, minimizing the financial risks for both consumers and merchants.


  • Higher rate of payment default: Due to the nature of the business model, Klarna experiences a higher rate of payment default compared to traditional payment methods, which can impact its revenue and profitability.


  • Expansion into global markets: With its proven success in existing markets, Klarna has the opportunity to expand its reach and capture new customer segments in international markets.


  • Increasing competition in the fintech industry: Klarna faces fierce competition from other players in the rapidly growing fintech industry, which may affect its market share and growth potential.

How Klarna Makes Money

Klarna generates revenue through various sources, utilizing a combination of interest fees, late fees, merchant commissions, and Klarna Card payments.

Interest Fees

One of the key revenue streams for Klarna is through interest fees. Klarna offers financing options to customers for larger purchases, allowing them to pay in installments over time. Interest fees are charged on these financing options, providing Klarna with a source of revenue.

Late Fees

In addition to interest fees, Klarna also earns revenue from late fees. If customers miss their payment deadlines, they are charged late fees for each late payment and for each month they fall behind. The late fees contribute to Klarna’s overall revenue generation.

Merchant Commissions

Another significant revenue stream for Klarna is through merchant commissions. Retailers who utilize Klarna’s services pay a flat transaction fee and a percentage of the total sale cost for each transaction made through the platform. These merchant commissions add to Klarna’s revenue generation.

Klarna Card Payments

Klarna’s payment ecosystem includes the Klarna Card, which allows customers to make purchases at affiliated brick-and-mortar retail stores using a virtual card. Klarna earns revenue from Klarna Card payments through various sources, including late payments and monthly card fees.

Financial Performance of Klarna

Klarna, a leading player in the fintech industry, has demonstrated impressive financial performance, showcasing consistent growth and substantial revenue numbers. In the second quarter of 2023, Klarna reported a revenue of 6 billion Krona ($549.9 million), highlighting its strong market presence and success in the digital payments sector.

Furthermore, Klarna has achieved a commendable valuation, further solidifying its position as a dominant player in the industry. With its innovative business model and ability to cater to the evolving needs of consumers, Klarna continues to enhance its financial performance and establish itself as an influential force in the fintech landscape.

Financial Performance Snapshot

Below is a snapshot of Klarna’s financial performance, demonstrating its revenue growth over the years:

YearTotal Revenue (in Krona)
202028 billion Krona ($2.6 billion)
202142 billion Krona ($3.9 billion)
202256 billion Krona ($5.1 billion)
2023 (Q2)6 billion Krona ($549.9 million)


With its innovative Buy Now Pay Later business model, Klarna has revolutionized the way consumers shop and pay for products, providing them with convenience, flexibility, and enhanced customer experiences. The success of Klarna in the fintech industry is evident from its strong financial performance and widespread popularity.

Klarna’s emphasis on delivering a seamless and user-friendly payment experience has reshaped the future of digital payments and influenced consumer trends. By allowing customers to make purchases without immediate payment, Klarna has enabled consumers to enjoy the benefits of online shopping while maintaining control over their finances.

As a leading player in the retail industry, Klarna continues to drive the growth of e-commerce, empowering both consumers and merchants. With its secure and convenient platform, Klarna has earned the trust and respect of customers, making it a preferred choice for online transactions. The success of the Klarna business model affirms its position as a fintech industry leader and sets new standards for the integration of technology and finance.


What is Klarna’s business model?

Klarna’s business model revolves around offering payment solutions for online shopping, allowing customers to make purchases without immediate payment.

When was Klarna founded?

Klarna was founded in 2005 in Stockholm, Sweden.

What is Klarna’s mission and vision?

Klarna’s mission is to make payments simple, safe, and smooth for its customers, empowering them and providing them with the tools to manage their finances effectively. Their vision is to enable consumers to make fast and informed decisions.

How does Klarna generate revenue?

Klarna generates revenue through merchant commissions, in-store Klarna Card transactions, late payment fees, and interest fees charged for financing options.

Who are Klarna’s customer segments and what are their value propositions?

Klarna caters to two customer segments – consumers and merchants. Consumers benefit from convenient payment options, a one-click checkout process, risk reduction through features like Pay After Delivery, and increased brand respect. Merchants value Klarna for the convenience it offers to their customers, performance improvements in conversion rates, risk reduction, and increased brand respect.

How does Klarna engage with customers?

Klarna operates through online and offline channels, with most transactions occurring online. The Klarna Card and app complement the online platform, providing customers with a seamless payment experience. Klarna provides personalized assistance through various channels such as chats, emails, phone calls, and social media platforms.

What are Klarna’s strengths, weaknesses, opportunities, and threats?

Klarna’s strengths include high demand for its services, a simplified online shopping experience, and strong risk protection. Weaknesses include a higher rate of payment default. Klarna has opportunities for expansion into global markets but faces threats from increasing competition in the fintech industry.

How does Klarna make money?

Klarna generates revenue through interest fees for financing options, late fees for missed payments, merchant commissions for sales made through the platform, and Klarna Card payments.

What is Klarna’s financial performance?

In the second quarter of 2023, Klarna reported revenue of 6 billion Krona (9.9 million) and has achieved impressive growth and valuation, solidifying its position as a leading player in the fintech industry.

How has Klarna impacted consumer trends?

Klarna’s business model has revolutionized the way consumers shop and pay for products, providing convenience, flexibility, and enhanced customer experiences in the realm of digital payments.