Klarna and Stripe Expand Global Payments Integration
Global payments company Klarna has expanded its partnership with payments infrastructure provider Stripe, extending buy now, pay later (BNPL) services to merchants across 25 countries.
Merchant acquisition rates doubled in Q4 2024 as a result of this strengthened collaboration, marking a significant shift in the payments landscape.
Market landscape
Merchants using Stripe's platform can now implement Klarna's payment options through their existing payment infrastructure.
From startups to Fortune 500 companies, businesses on Stripe's platform have gained access to a coding-free A/B testing function for payment methods, enabling real-time assessment of conversion rates and revenue impact.
According to Stripe's research, offering BNPL services led to a 14% increase in revenue through improved conversion rates and higher average order values.
“At the core, Klarna is a global network connecting 85 million active consumers with retailers"
Consumers using these payment options can split purchases into instalments or defer payments without accruing interest charges, while merchants benefit from the immediate settlement.
Within Klarna's payment ecosystem, immediate transactions account for 30% of processed payments, while interest-free BNPL products and longer-term financing options make up the remainder.
Built-in consumer protection measures have resulted in default rates below those of traditional credit products, strengthening the company's position in the consumer finance market.
David Sykes, Chief Commercial Officer at Klarna, says: “At the core, Klarna is a global network connecting 85 million active consumers with retailers.
“The more retailers we add, the more consumers we attract and vice versa. The ambition is to make Klarna payments available everywhere, for everything, all the time.”
Strategic implications
Initially partnering during the Covid-19 pandemic in 2021, both firms have now created a comprehensive payment solution across Stripe's platform, moving beyond their previous integration.
Following Klarna's divestment of its Checkout business to investors in 2023, Stripe now receives a share of transaction fees processed through the integration, though specific financial terms remain undisclosed.
Since October 2024, 100,000 new merchants have joined Klarna's platform, gaining access to its 85 million active users across various markets.
BNPL transaction volume on Stripe's platform grew by 172% in 2023 compared to traditional payment methods, highlighting increasing merchant demand for instalment payment options.
“Stripe is now the easiest way for businesses to offer Klarna"
Merchants can now measure conversion rates in real-time and assess revenue impact through built-in analytics tools.
News of the expanded partnership emerges as Klarna prepares for its United States initial public offering, following a confidential filing in November.
Founded in 2005, the Swedish fintech company's valuation has fluctuated significantly, reaching US$46bn in 2021 before adjusting to US$6.7bn in 2022.
Market analysts suggest the partnership could strengthen Klarna's position ahead of its public listing, with Deutsche Bank analysts calculating an implied valuation for Klarna – upon filing for its IPO – of US$14.6bn.
This valuation was based on shareholder Chrysalis Investments' stake value adjustment in Klarna to £120.6m (US$153.6m). to £120.6m (US$153.6m).
Jeanne DeWitt Grosser, Chief Business Officer at Stripe, concludes: “Stripe is now the easiest way for businesses to offer Klarna.
“Thanks to our partnership, businesses on Stripe will continue to grow their revenue and offer consumers more options in how they can pay.”
Explore the latest edition of FinTech Magazine and be part of the conversation at our global conference series, FinTech LIVE.
Discover all our upcoming events and secure your tickets today.
FinTech Magazine is a BizClik brand
