Klarna's BNPL Volume Advantage

Klarna’s edge is not raw reach, it is purchase intent and checkout share in the specific BNPL use case. PayPal reaches far more people because it sits almost everywhere online, but Klarna converts more BNPL volume because it was built around installment checkout, merchant merchandising, and a shopping app that pushes repeat financed purchases. That makes Klarna more like a specialized retail network, while PayPal remains a broad payments utility with BNPL as one feature among many.

• By 2024, Klarna processed about $105B in GMV, versus roughly $33B to $35B for PayPal Pay Later. That gap matters because BNPL volume, not total wallet users, is what drives merchant learning, underwriting data, and repeat installment behavior inside Klarna’s network.
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• PayPal’s scale advantage comes from distribution. Earlier research showed PayPal had 350M plus consumers, 25M merchants, and acceptance on 54% of websites, while Klarna was on about 1.2%. But PayPal also offered BNPL at no added merchant cost, which made it a defensive add on for existing checkout flows, not a product merchants adopted to drive shopping demand.
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• Klarna’s BNPL product is tied to a fuller shopping loop. The app sends leads to merchants, surfaces featured stores, supports one time virtual cards, and increasingly monetizes ads, subscriptions, cards, interchange, and lending. That is why Klarna can turn BNPL usage into a closed loop consumer habit, while PayPal is still mostly a payment choice shown alongside many other buttons at checkout.
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The next phase is a fight over who owns the buying flow before the final payment click. If Klarna keeps turning financed checkout into repeat shopping behavior, merchant traffic, and lower cost bank linked payments, its smaller user base can keep producing outsized BNPL volume and push it closer to a true parallel commerce network.