Posted: February 12, 2025 | Updated: January 10, 2026 at 9:33 PM
Swedish Buy Now, Pay Later (BNPL) giant Klarna has secured a major global partnership with Stripe, a leading Irish-American financial infrastructure provider.
Through this collaboration, Klarna Stripe partnership will leverage Stripe’s extensive platform to deliver flexible payment solutions across 26 countries. Merchants using Stripe will benefit from seamless integration of Klarna’s BNPL options, driving higher conversion rates and increased average order values by offering customers enhanced payment flexibility.
In the past decade or so, the payments ecosystem has experienced a paradigm shift in consumer payment preferences. Credit card models, which once dominated the market, are now being complemented (or even replaced) by more flexible payment options. BNPL has come out as the solution to cater to this evolving market demand by offering consumers a way to make purchases and pay them over time (usually in 4-6 months), without paying interest or fees.
Klarna has been the frontrunner in the BNPL space, offering consumers multiple payment options – including immediate payments, short-term interest-free installments, and longer-term financing – leading to lower cart abandonment rates and an increase in revenue. On the other hand, Stripe is a known financial infrastructure platform based in the US. The company offers a suite of tools that simplify payment processing, billing, and financial management. Stripe enables businesses to scale efficiently.
On January 14, 2025, Stripe and Klarna announced a strengthened global partnership enabling businesses on Stripe’s platform in 26 countries to instantly offer Klarna’s suite of payment options, ranging from immediate payments to buy now, pay later and longer-term financing. This new collaboration—launched in the fourth quarter of 2024—extends the initial October 2021 integration (which covered the United States and 19 European markets) to North America, Oceania, and two dozen European countries, putting Klarna’s flexible payment methods within reach of millions more merchants overnight.
Under the partnership, merchants integrating Klarna via Stripe can deploy flexible payment plans—including 3- or 4-installment interest-free schedules, 30-day pay-later options, and financing terms spanning 6 to 36 months—without credit or fraud risk, as Klarna indemnifies the merchant and pays them in full upfront.
This isn’t the first collaboration between Klarna and Stripe, the payments giant dual-headquartered in San Francisco. Previously, in 2021, during the fintech surge driven by the COVID-19 pandemic, Stripe integrated Klarna’s BNPL services for its merchants, though with more limited features.
Merchants can also offer their customers flexible payment options without complex implementations. Stripe has introduced a groundbreaking feature that enables businesses to instantly do A/B testing with various payment methods, such as Klarna, with no need for coding. The partnership follows Klarna’s sale last year of its Klarna Checkout business to an investor consortium.
Early adopters report measurable lifts in performance: merchants offering BNPL through Stripe see increased conversion and higher average order values, with revenue gains of up to 6.6% on Klarna-eligible sessions and up to 40% of Klarna-powered shoppers being new to their brand.
David Sykes, the Chief Commercial Officer of Klarna, highlighted the importance of their partnership, noting Klarna’s role as a vast global network linking 85 million active users with various retailers. He explained that expanding their retailer base enhances consumer attraction, creating a mutually beneficial cycle. Klarna’s goal is to ensure its payment solutions are ubiquitously available for every type of purchase, at any time. He regards Stripe as an ideal distribution ally, favored by both Fortune 500 corporations and the most innovative startups worldwide.
This deal is built on Stripe’s single-integration model—there’s no additional application, underwriting, or paperwork for eligible businesses—and leverages a unified dashboard for monitoring, reporting, and reconciliation. Stripe’s machine-learning engine dynamically surfaces the most relevant payment methods, ensuring Klarna’s options appear at optimal moments in checkout. The move follows Klarna’s June 2024 sale of its proprietary checkout platform (Klarna Checkout) to focus solely on its core, flexible payment services and eliminate channel conflict with PSPs like Stripe and Adyen.
Together, the two fintech giants bring colossal scale to bear: Klarna closed 2024 with 93 million active customers across 26 markets and $2.81 billion in revenue, while Stripe—valued at roughly $91 billion—processed $1.4 trillion in payment volume last year, making it the largest privately held fintech firm in the world. Their combined reach spans millions of merchants and tens of millions of consumers, creating a potent force multiplier for global commerce.
The timing of the enhanced integration dovetails with Klarna’s preparations for its long-anticipated U.S. initial public offering. Media reports suggest the company aims to raise over $1 billion at a valuation north of $15 billion, driven by robust 24% revenue growth in 2024 and a net profit of $21 million. That growth is underpinned by a BNPL market projected to exceed $160 billion by 2032, as major retailers and digital platforms partner with fintech pioneers to capture credit-averse consumers.
As Stripe cements its status as a top choice for both Fortune 500 companies and ambitious startups, the partnership leverages Stripe Connect to make Klarna available across platforms and marketplaces with zero integration lift for end users. While Stripe supports Klarna in 45 markets globally, the in-platform rollout specifically covers Australia, Canada, New Zealand, the United States, and 24 European jurisdictions. This frictionless distribution model positions Klarna “to make Klarna payments available everywhere, for everything, all the time” and equips merchants worldwide with best-in-class payment flexibility.
Instant transactions represent 30% of Klarna’s payment network, while the remaining transactions consist of interest-free Buy Now, Pay Later (BNPL) plans and extended financing. Klarna’s implementation of robust consumer protection safeguards has resulted in default rates significantly lower than traditional credit products, strengthening its position in consumer finance. Following Klarna’s sale of its Checkout business in 2023, Stripe began earning a share of transaction fees from integrated BNPL services, reflecting the growing merchant demand, as evidenced by a 172% increase in BNPL transaction volume on Stripe’s platform compared to traditional payment methods that year.
Since October 2024, Klarna has boarded 100,000 new merchants, doubling merchant adoption rates by the fourth quarter. Stripe’s Chief Business Officer, Jeanne DeWitt Grosser, emphasized that Stripe has streamlined Klarna’s integration, enabling businesses to increase revenues and offer consumers more flexible payment options.
Klarna, founded in 2005 by Sebastian Siemiatkowski, Victor Jacobsson, and Niklas Adalberth, is a Swedish fintech company headquartered in Stockholm. The company specializes in providing online financial services, particularly in the BNPL sector, offering users flexible payment plans such as direct payments, pay-after-delivery, and installment plans. These services are integrated into a seamless one-click purchase experience, enhancing users’ online shopping journey. Over the years, Klarna has expanded its reach, partnering with over 500,000 merchants and serving over 85 million consumers across 26 countries.
In recent developments, Klarna has been preparing for an initial public offering (IPO) in the United States, with plans to go public in April 2025. The company is targeting a valuation of up to $15 billion, making it one of the most extensive listings of the year. This move comes after significant growth and strategic initiatives, including integrating artificial intelligence to streamline operations and enhance customer experiences. Despite facing challenges in the past, such as a valuation drop from $46 billion in 2021 to $6.7 billion in 2022, Klarna has demonstrated resilience by narrowing its losses and moving closer to annual profitability. The upcoming IPO is anticipated further to solidify Klarna’s position in the global fintech space.
Stripe, founded in 2010 by Irish brothers Patrick Collison and John Collison, is a prominent financial technology company that provides economic infrastructure for the internet. Headquartered in both South San Francisco, California, and Dublin, Ireland, Stripe offers a comprehensive platform enabling businesses of all sizes – from startups to large enterprises – to accept online payments and manage their operations seamlessly. The company’s suite of products includes payment processing, billing, fraud prevention tools, and customizable financial solutions, all designed to facilitate and secure online transactions.
Over the years, Stripe has experienced significant growth and expansion. As of 2023, the company employs over 8,000 people and operates in more than 45 countries, supporting over 135 currencies and payment methods. In 2022, businesses utilizing Stripe processed over $817 billion in payments. The company’s impressive client roster includes industry leaders such as Spotify, Google, and Facebook, underscoring its reputation as a trusted partner in the digital economy. Stripe’s mission is to increase the GDP of the internet by providing robust and scalable financial tools that empower businesses worldwide.
The expanded partnership between Klarna and Stripe marks a significant step in the evolution of global digital payments. By combining Klarna’s flexible financing options with Stripe’s broad merchant reach and robust infrastructure, the two companies are enabling more businesses to meet changing consumer expectations around payment flexibility.
For merchants, this means easier access to BNPL tools that can improve conversion rates and drive revenue growth. For consumers, it offers greater choice and control at checkout. With Klarna preparing for a public offering and Stripe continuing to grow its influence in the payments space, their collaboration sets the stage for wider BNPL adoption and further shifts in how online transactions are handled worldwide.
