Swedish fintech Klarna is prioritising a push into banking services after volatile market conditions derailed its long-awaited public listing and regulatory frameworks for its flagship buy now, pay later (BNPL) product begin to crystallise.
Founded in 2005 by Sebastian Siemiatkowski, Klarna is most known for its landmark BNPL product, which enables shoppers to delay or split payments across interest-free instalments.
Now Klarna’s chief marketing officer David Sandstrom tells Sifted it’s accelerating a push into retail banking services.
“I have a huge job to do when it comes to positioning buy now, pay later as a fantastic feature of Klarna, but not being Klarna,” Sandstrom says. “Klarna is moving rapidly into becoming a retail bank.”
Shifting perceptions
In the past Klarna has marketed itself as a “Google for shopping” and an AI-powered “global payments network” in addition to its modus operandi. Last week, the Swedish fintech unveiled its own Visa debit card for US customers in a signal of its ambition beyond buy now, pay later.
The Klarna Card will allow consumers to store money with the fintech and make transfers. It will also integrate with Klarna’s Pay in 4 and Pay Later products. Sandstrom says Klarna plans to create a tiered subscription product specifically for the debit card with loyalty schemes that could include cashback.
The bid to become a “global consumer bank” in the vein of fellow fintechs Revolut, PayPal and NuBank comes at a time when the financing option it made famous is set to face greater regulatory scrutiny.
In the UK from next year, BNPL companies will need to follow consistent standards, including upfront checks, faster access to refunds and the right to complain to the Financial Ombudsman, bringing them in line with other credit products.
From a revenue perspective, Klarna still makes the majority of its money by charging merchants a percentage fee on transactions; merchant fees brought in $2.1bn in revenue in 2024, equivalent to 75% of its transaction and services revenue.
Sandstrom, however, says that even without the banking push the company is already moving beyond BNPL. He tells Sifted that around 50% of its transactions in Europe use its Pay Now product over splitting the costs.
“We’re a stable and well-hedged business,” he says, citing usage of its Pay Now product and its revenue figures. “And through our times we’ve also been very recession-proof.”
Klarna last month released its Q1 2025 financials, in which the fintech revealed a net loss of $99m compared to $47m for the same period a year prior.
Media reports at the time spotlighted a 17% increase in credit losses, to $136m, suggesting consumers were failing to repay loans from the Swedish BNPL lender and coming amid fears of a possible US recession. Sandstrom says the rise can be attributed to the company’s growth — revenue at the fintech grew by 13% year-on-year as Klarna’s active customers grew by 18% to 100m.
“As a proportion of our growth, consumer losses are actually going down,” he says.
Eat now, pay later
According to 2024 financials, the US is Klarna’s largest market, accounting for close to a third of its $2.8bn in revenue last year. The fintech has also made an aggressive drive to court US customers in recent years by ramping up partnerships with big-name brands such as Walmart, eBay and DoorDash.
Those partnerships haven’t always hit the mark with the public, however.
When Klarna’s deal with food delivery app DoorDash was announced in March, it was subject to social media memes questioning the logic of using the financing option for takeaway food products like burritos.
“The memes aren’t always positive but we’ve really become a part of culture,” he says. “And it’s not easy for brands to become a part of culture.”
When asked if it’s wise to BNPL a burrito, Sandstrom tells Sifted: “I personally don’t believe you should split a burrito in four.”
IPO update
The DoorDash deal was just one of the many that was announced in the run up to Klarna’s long-anticipated and now shelved initial public offering.
Initially pegged for April this year, Klarna’s float on the New York Stock Exchange was paused amid torrid market conditions fanned by US President Donald Trump’s tariff agenda. It was eventually delayed until late 2025.
Sandstrom says he isn’t frustrated by the delays. “At Klarna, 99% of people don’t care about the IPO,” he tells Sifted. “If I were the kind of person who connected my happiness to an IPO, I would hate myself.”
Instead, Sandstrom looks to the brand-name partnerships and the Visa debit card launches for indicators on how business is going at Klarna.
“I can find my happiness in the card launch, in the Walmart launch and all the other things that are coming,” he says. “I’m not emotionally connected to an IPO whatsoever.”
Read the orginal article: https://sifted.eu/articles/klarna-david-sandstrom-interview/
