Klarna in Society
At Klarna, our mission is to reimagine how consumers spend and save in their daily lives. We help people save time and money and reduce financial worry. With our focus on customer obsession and commitment to transparency and accountability at the heart of everything we do, we are proud to be a trusted partner to 85 million consumers and 575,000 retailers across 26 markets.
Our amazing talented people and innovative technologies enable us to deliver this mission and we believe that we are making a positive impact on society and helping to drive the global economy forward.
1. Who is Klarna
1.1 The payments network of the future
Klarna is a global leading AI-powered payments network and financial assistant that smooths commerce by offering fairer, more sustainable, innovative solutions. Our mission is to reimagine how consumers spend and save in their daily lives by providing a seamless and secure shopping experience that helps our customers:
Save time
Save money
Less financial worry
1.2 We’re a fast-growing consumer ecosystem
0m
global active consumers
0k
global retail partners
SEK 0.98t
total volume 2023 with 17% year on year growth
0k
employees across 23 offices
2.5m+
consumer transactions every day
85m+
app downloads
SEK 11.7b
transaction margin in 2023, with 14 out of 19 years being profitable
13.5k
connected financial institutions through our Open Banking platform
Partnered with the biggest brands
Trusted by the best consumers
Supported by leading investors
1.3 Everyone is using Klarna
People across the world are using Klarna for their everyday spending — both online and in-store, across all types of verticals and industries.
There is no typical Klarna consumer.
80%
of the total adult population in our most mature market are Klarna users
$163
is the average outstanding balance per customer vs $6,500 for credit card users
99%
of consumers pay off their balance with Klarna
1.4 Klarna customers are:
Balanced in gender representation
In all stages of life
Of all educational backgrounds
Living in all areas
1.5 Klarna is much more than just BNPL
We are a regulated bank and have offered flexible payment options since 2017
People choose Klarna for multiple reasons
1.6 Our customers have one thing in common – a deep distrust of traditional banks
When asked “is Klarna a better option than a credit card?“, here’s what Klarna consumers said:
Resulting in high customer engagement levels compared to the industry.
95%
Believe Klarna is a better option than a credit card.
93%
Are active after 12 months.
1.7 And it is not just Klarna customers who resent old banks
54%
Global trust level in the financial services industry — bottom of all in 2022
81%
Of US consumers aged 18-34 would prefer fintechs over legacy banks
63%
Of people don't entirely trust their banks to handle their data responsibly
2. We’re on a mission to smooth commerce
2.1 Banks’ original purpose was to promote trade
By facilitating the exchange of goods, early banks played a pivotal role in helping markets become more efficient.
2.2 However, the industry has lost touch with its original purpose
Evidence shows that banks have had the wrong priorities
Often at the expense of customers’ well-being
2.3 Contributing to the widening wealth gap in society
Incumbent banks and credit cards have paved the way for the greatest redistribution of wealth, where low-income households and the unbanked pay more but don’t benefit.
35 people pay $21
Lowest income households paying more to subsidize costs and fund credit card rewards.
1 person receives $750
Credit card benefits paid out to high-net-worth household in cash back and reward points.
3. Making markets smooth
Klarna is taking on the trillion-dollar retail banking industry to return to the original purpose that the traditional players have stepped away from - to promote and smooth commerce while putting consumers at the heart of what we do. With our suite of innovative products and services, we solve real problems for consumers and retailers and continue to ensure markets remain efficient while our customers remain satisfied. Not too bad for an old invoice company from Sweden. We empower our customers through solutions that offer:
3.1 Flexibility and choice
Pay in full
One-click payment, fast and secure.
Pay in 30
Interest-free, try before you buy.
3 or 4 payments
Interest-free, bi-weekly or monthly.
Fair financing
Interest free and interest bearing.
3.2 Credit at the lowest possible cost
Without Klarna
Predatory credit terms incentivized for profitability at the expense of consumers’ well-being.
29.9% point of sale APR
Average outstanding balance of $6,000
$5.50 — society pays to credit card providers for every $100 spent
With Klarna
We offer healthier payment options with full transparency and choice — no dirty tricks.
0% APR on BNPL products
Average outstanding balance of $100
Up to 60% lower costs society pays to Klarna for every $100 spent
3.3 Dynamic underwriting for sustainable lending
Without Klarna
One-off underwriting when consumers sign up, optimized by banks for their own profit.
Single underwriting decision doesn’t account for changing financial circumstances
Sky-high credit limits for new customers to drive unhealthy consumption
Automatic credit limit increases to promote usage
Encourages minimum repayments and allows cash withdrawals and balance transfers
Poor customer insights from legacy systems that rely on out-of-date data
With Klarna
Dynamic underwriting optimized for sustainable lending that puts the consumer first.
At every purchase: A new real-time underwriting decision for every transaction
Small limits on 1st buy: New consumers start with small credit limits
Gradual credit limit increases: subject to repayment history, with account frozen if payments are missed
Fixed dates/amounts: Credit for specific purchases with clear repayment terms, fixed and short-term. Consumers can’t borrow in cash
In real-time: Combines credit bureau and internal insights with open banking data to build a real-time view of a consumer’s financial position
Through our dynamic and more effective underwriting, we’re able to pass on savings to both retailers and consumers by providing credit at the lowest possible cost.
99%
repayment rate globally
35%
lower consumer and fraud losses than credit cards in mature markets
3.4 Simplifying consumers’ everyday lives
Without Klarna
A different app for each task.
With Klarna
With all tasks in one place, we’re reducing clutter for consumers.
3.5 A seamless user journey at no added costs to retailers
Without Klarna
A fragmented user journey when searching for card statements that charges retailers for customers they already have.
Retailers spend on average $0.2 per click on branded search ads
With Klarna
Statements with SKU-level data allow consumers to engage with their favorite brands again and again, at no added cost to the retailer.
Est $10m in annual savings in retailer ad spend
3.6 We’re the network of choice
And we will continue to deliver better consumer and retail partner outcomes, to build preference and power our long-term growth.
For consumers
40%
more app downloads than our closest competitor
2x
retention rate compared to industry standards
93%
of consumers are active after 12 months, versus 55% of credit cards
And retailers
5x
growth in number of merchants since 2018
49
of the US top 100 retailers choose us as their partner
835m
leads sent to retailers in 2023
4.1 We know what consumers value
Without Klarna
Irrelevant ads that make no sense
An experience/product that causes worry and stress
Impersonal treatment with no concern for your well being
With Klarna
Truly relevant and interesting ads
A tailored experience that suits you
The same familiarity of your favorite local restaurant or corner shop
4.2 A great matchmaker that builds long-lasting relationships
We have a deep understanding of the digitally transforming market, its players and their needs, and can turn that into great offers and services with our state-of-the-art technology.
Masterful matchmaking for better retention
Building valuable, long-term relationships between consumers and retailers
Assisting brands and products to better understand their customers
Delivering superior pre- and post-purchase experiences across channels
Supporting local businesses to become global
Allowing consumers to own their data and maximize its value across the ecosystem
5.1 Big Tech has exploited its power similarly to banks
They misuse consumer data, exploiting and locking them in
79% of frequent internet users agree that companies don’t allow them to control their own information.
They extort fees from retailers who have no choice but to buy their service
14% higher Google Shopping prices than other comparison services.
The result? Trust is undermined.
87%
of US consumers don’t trust Big Tech. Source: PR Newswire
66%
of small business owners say large corporations, such as Amazon and Google, have a negative impact on their growth opportunities. Source: Lendio
5.2 We know trust is built on honesty
We are huge in Sweden where we are now part of people's everyday lives, but our journey there has taught us much.
Just another digital payments solution
We started off by following a simple recipe: Make online shopping easier and safer; Drive online sales; Replicate old banks’ lucrative business models.
Becoming the change we wanted to see
We realized the industry’s practices were not aligned with customers’ best interests, so: Our first approach was to be honest about it. Our second approach was to transform the industry.
Competition pushed us to be better, faster
The road was challenging and change was slow - there was nothing driving us forward! It wasn’t until some worthy opponents appeared that we were able to pick up the pace and transform our entire business.
We have learned from past mistakes and those learnings are now embedded in Klarna’s very DNA!
Customers always come first
If it’s good for your customer, it’s good for you.
If you’re big, you have to be nice
As you benefit from economies of scale and better margins, give that back to consumers with lower prices.
Promote and embrace competition
Both within and without, it will make you better, stronger, and more focused!
5.3 Finally, unlike ‘Big Tech’, we promote and reward data mobility
Without Klarna
Big techs gate-keep data under the pretense of protecting privacy. They then monetise this data, growing their profits at the expense of society.
With Klarna
We give consumers ways to securely share their data with partners, helping them understand what they are doing and that the whole ecosystem shares the rewards.
6. Driving better outcomes for consumers
6.1 Access is key
We firmly believe in consumer choice — the more options for consumers the better as studies suggest that limiting choice by restricting access can have dangerous implications and put consumers in harm’s way.
Well-functioning, competitive markets are the strongest force to grow societal value and bolster consumers’ access to healthier providers, by pushing industry players to improve their standards and the quality of their offering.
6.2 Regulation should set the guardrails
Not all providers are created equal so we need regulation — specifically outcomes-based regulation, which drives innovation and empowers consumers to safely access new products and services while protecting them from harmful industry practices and bad actors.
But balance is crucial as too much regulation has often led to unintended consequences that ultimately end up harming consumers.
Klarna has an increasingly profound impact on the world, and we constantly reflect on our responsibility and purpose to society, with our mission to smooth commerce as our Northstar. By challenging the industries we operate in, with a singular focus on serving our customer's best interests, we will continue to deliver real value to society. This is who we are. This is why we are.
All financials as of December 2023 unless otherwise stated.
Last updated: April 2024