Klarna attributes the 20% rise in its revenues to broadening its network of merchants
Klarna, the popular Buy Now, Pay Later (BNPL) service, is making a significant push into the United States market. The company, which boasts 111 million active consumers and 790,000 merchant partners globally, is leveraging a $26 billion funding agreement with Nelnet, a US-based financial services firm, to scale its Pay in 4 BNPL product.
The partnership with Nelnet, announced during the second quarter, diversifies Klarna’s capital sources beyond banks and securitizations and provides off-balance-sheet, predictable capital to support growth without increasing balance sheet risk.
Product Growth and Merchant Partnerships
Klarna is focused on responsible scaling of its core BNPL installment product, continuing to originate and service all receivables themselves to maintain customer and merchant experience quality. The company recently piloted an enhanced Klarna Card in the US, began powering OnePay Later at Walmart, and extended its partnership with eBay to the US market.
Upcoming Collaborations
Klarna plans further US collaborations with payment networks and financial partners including Worldpay, Nexi, and JPMorgan Payments to bolster payment options and merchant integration. The company expects to launch these collaborative projects in the coming quarters.
Financial Performance
Klarna’s US revenues rose 38% year-over-year, demonstrating growing consumer adoption and merchant ecosystem expansion in the US market. The company reported $823 million in revenue for the second quarter, a record number of transactions paid on time or early by its customers, and a decline in both credit losses and delinquency rates.
The delinquency rate on BNPL loans for Klarna fell from 1.03% a year earlier to 0.89% in the second quarter, while the delinquency rate on its Fair Financing fixed-term product declined from 2.34% a year earlier to 2.23% in the same period. The realized credit losses for Klarna also fell from 0.48% a year earlier to 0.45% in the second quarter.
A Healthy Consumer Base
CEO Sebastian Siemiatkowski noted that Klarna's consumer base remains healthy, with more customers paying on time than ever before. The popularity of the Klarna Card, which is gaining traction in mature European markets and being rolled out in the US with an enhanced version, is also contributing to this positive trend.
Walmart Partnership
Klarna became Walmart’s exclusive provider of installment loans, giving Walmart’s customers in the US access to flexible payment options integrated into the retailer’s checkout. This partnership marks a significant step in Klarna’s US expansion strategy.
In summary, Klarna is aggressively expanding in the US through a significant capital partnership to scale its BNPL offering, broadening merchant reach with major retail collaborations, launching new payment products, and preparing for a public market debut to fuel further growth.
- Klarna's strategic partnership with Nelnet, a US-based financial services firm, worth $26 billion, is aimed at scaling the company's Pay in 4 Buy Now, Pay Later (BNPL) product in the United States market.
- Klarna expects to launch collaborative projects with payment networks and financial partners like Worldpay, Nexi, and JPMorgan Payments in the coming quarters, which are planned to bolster payment options and merchant integration.
- The company's US revenues rose 38% year-over-year, showcasing growing consumer adoption and market expansion, along with reporting a record number of transactions paid on time or early by customers and a decline in both credit losses and delinquency rates.
- Klarna, in partnership with Walmart, has become the exclusive provider of installment loans, providing Walmart's customers in the US with flexible payment options integrated into the retailer’s checkout, signifying a significant move in Klarna's US expansion strategy.
