Klarna Owning Pre-Checkout Intent

Klarna is attacking PayPal by trying to own shopping behavior before checkout, not just payment at checkout. PayPal is strongest as a stored wallet and branded button used across a huge merchant base, with 434 million active accounts in 2024, while Klarna has built a smaller but more shopping focused network, with 93 million active consumers, 675,000 merchants, and $105B of GMV in 2024. The app, rewards, virtual card, and merchant discovery all pull consumers into Klarna earlier in the purchase flow.

• Klarna started as a checkout financing button, but the strategy shifted toward a consumer shopping app because a button alone is easy to commoditize. Internal research shows Klarna pushing for direct customer relationships, first party shopping data, and repeat usage across merchants, not just a one time loan at the cart.
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• The practical difference is where each company shows up. PayPal wins when a shopper reaches checkout and recognizes the PayPal button. Klarna wants to influence which store gets visited, which item gets bought, and how it gets paid for, using featured merchants, cash back, one time cards, and in app browsing.
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• This is why the youth brand mix matters. Klarna is strongest with fashion and internet native merchants where basket sizes, repeat browsing, and promotional discovery all matter. That makes it look less like a generic payments network and more like a retail traffic source that also carries the financing and payment credential.
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The path forward is a fight over who becomes the default commerce layer on the phone. If Klarna keeps moving more users from checkout financing into daily shopping, rewards, cards, and bank linked payments, it can keep taking a larger share of purchase intent from PayPal even without matching PayPal account scale.