OpenAI collaboration support! A comprehensive look at how Sweden's Klarna became a "BNPL" payment giant.

In recent years, when shopping online, people often see the "buy now, pay later" payment option, and one of the driving forces behind this is the Swedish fintech company Klarna. Since its founding in 2005, it has partnered with over 790,000 merchants, and has integrated AI technology with digital banking, achieving impressive revenue of $701 million in Q1 2025.

Relying on "Buy Now, Pay Later", serving 100 million users worldwide.

Klarna was founded in 2005 and launched the "Buy Now, Pay Later (BNPL)" service in Sweden, which allows users to shop online and defer payment or choose to pay in installments, usually without interest.

As a result, Klarna successfully entered the European and American markets with this model, expanding its services to 26 countries, with over 100 million active users worldwide and collaborating with as many as 720,000 merchants. In Q1 2025, revenue even reached 701 million USD, growing approximately 15% compared to the same period last year, indicating that the overall scale continues to expand.

Why is Klarna important?

According to reports, Klarna's user base is rapidly growing in the United States, with active users exceeding 37 million in the U.S. market in 2023, a year-on-year increase of 32%. Additionally, the number of partner merchants has reached 26,000, marking a 38% annual growth. Furthermore, a survey indicates that in 2024, 12% of consumers in the U.S. have used Klarna for payments in the past year, showing a continued rise in user acceptance.

As for cooperation with large operators, Klarna has also partnered with Walmart (Walmart), DoorDash, and eBay, integrating BNPL into these platforms. Klarna CEO Sebastian Siemiatkowski further stated that they are strengthening the application of AI in their own business.

How to Introduce AI as a Moat for Klarna?

One of Klarna's competitive advantages is its leading applications in AI and machine learning. Klarna has previously become an early partner of OpenAI and launched the ChatGPT plugin for "Klarna Shopping". Consumers can simply input their needs and budget in ChatGPT, and the AI can quickly help users search and recommend products that meet their criteria on the Klarna website.

In addition, Klarna has launched a 24-hour multilingual AI customer service assistant that can handle nearly 66% of customer service requests, reducing the average problem resolution time from 11 minutes to 2 minutes, and the repeat inquiry rate has also dropped to 25%. This AI system can replace the workload of about 700 human customer service representatives, with an estimated savings of 40 million dollars by 2025. However, in order to balance efficiency and service quality, Klarna ultimately adopts a mixed customer service model of AI and human agents.

In addition, Klarna has also introduced AI into its marketing and engineering departments, helping the marketing department save 10 million dollars, while the engineering team accelerates development speed through AI-assisted programming and review. Since the first quarter of 2023, Klarna's revenue per employee has increased by 152%, moving towards the goal of "each employee generating 1 million dollars in revenue."

Overall, Klarna has significantly enhanced its real-time judgment capabilities in credit risk management through the deep integration of AI technology, and has also achieved notable results in customer service automation. These technological advantages, combined with a vast ecosystem of users and merchants, create a strong competitive moat.

What are Klarna's advantages over its competitors?

There are competitors in the market such as Affirm and Afterpay in the BNPL space, but Klarna has an advantage in the competition due to its earlier market entry, larger scale, more advanced technology, and richer product line. According to the latest data, Klarna's payment transaction volume in the United States reached $25.77 billion, a year-on-year increase of 17.2%, far exceeding Afterpay's $10.16 billion, which saw a year-on-year increase of 10.9%.

In terms of partner merchants, Klarna has over 790,000 globally, with about 318,000 in the United States, far more than Afterpay's global 108,000 and 48,000 in the United States. Affirm mainly focuses on the North American region, with about 560 partner merchants in Canada by 2025, accounting for about 8% market share.

In terms of products and technology, Klarna not only offers 0% interest four-installment payments and 30 days deferred payments, but also actively develops digital banking and financial services. Its product line is richer, and its gross profit margin remains stable at 47-49%, higher than Affirm's approximately 40%, indicating stronger profitability.

Klarna's future challenges?

Firstly, Klarna is also affected by global economic uncertainty and rising interest rates, with a loss of nearly $99 million in Q1 2025, and has suspended its IPO plans in the United States. Additionally, the UK will strengthen BNPL regulations starting from 2026, and global compliance pressures are also continuing to increase.

In addition to Affirm and Afterpay in the market, payment giants like Visa and Mastercard have also joined the fray. Furthermore, Klarna must strengthen its innovation and cost control, as the default rate for small payments and delivery orders has been rising. Klarna's credit risk management faces challenges and needs to rely on AI technology to enhance risk control.

Although Klarna has reduced customer service costs with AI, it has recently re-employed human customer service representatives due to considerations of service quality, indicating that efficiency and customer experience still need to be balanced.

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This article is supported by OpenAI! A comprehensive understanding of how Sweden's Klarna became a "BNPL" payment giant. Originally published on Chain News by ABMedia.