Klarna building vertically integrated payments bank

Klarna is trying to turn a checkout loan button into an everyday money system. The shift matters because BNPL alone is easy for rivals to copy, while a stack that includes merchant checkout, the consumer app, balance accounts, debit spending, rewards, and lending lets Klarna control more of the transaction and keep more of the data and economics. That is how it moves from a feature at checkout toward a parallel payments network.

• The concrete product move is from financing a single purchase to handling the whole shopping flow. Klarna already used BNPL to win merchant integrations, then added a shopping app, and by 2024 about 35% of its European GMV was debit rather than BNPL, with the app driving about $10B in annual GMV.
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• Vertical integration means owning more steps that banks and card networks usually split up. Klarna can market products to shoppers, underwrite the loan, hold balances, issue a debit first card, route payment through its own app, and in some cases connect directly to bank accounts to reduce Visa and Mastercard processing costs.
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• This is also why PayPal is the right comparison. PayPal is much larger in total payments and active accounts, but Klarna built denser merchant relationships around shopping and installment use. The goal is not just more BNPL volume, it is to become the preferred wallet and checkout layer for the same consumer and merchant on both sides.
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The next phase is Klarna making debit and stored balance the default behavior, with credit available when needed. As more volume moves through cards, wallet, balances, and in store payments, Klarna looks less like a lender and more like a consumer bank merged with a merchant checkout network, which is a much bigger and more durable business.