Retailers join Klarna to cede customer relationship
Former Klarna merchant partner on why retailers sign up with Klarna
Klarna’s real ambition is to stop being a financing widget at checkout and become the layer that controls shopping traffic, payment choice, and merchant demand. In practice that means using BNPL to get onto merchant sites, then pulling shoppers into Klarna’s own app, rewards, cards, and ads products so more of the purchase journey happens inside Klarna instead of with the merchant, card network, or another wallet.
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For merchants, Klarna is sold as a conversion tool. Klarna pays the retailer upfront, takes a 3% to 6% commission, absorbs credit risk and chargebacks, and argues that higher order conversion offsets the lower margin per sale. That gives Klarna a reason to sit directly in the checkout flow and gather purchase data.
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The business has already shifted beyond pure BNPL. By 2024, merchant fees were 57% of revenue, down from 75% in 2020, while ads, interest bearing loans, late fees, subscriptions, and card interchange became a larger mix. That is what owning more of the customer relationship looks like financially, more touchpoints, more ways to monetize each shopper.
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Klarna’s model is closer to a shopping network than to Affirm’s lender model. Affirm is stronger on high ticket purchases through partners like Shopify and Adyen, while Klarna is optimized for lower average order value purchases and a consumer app with rewards. The strategic goal is to own discovery through checkout before PayPal, Apple Pay, or banks turn installments into a commodity feature.
The next phase is Klarna pushing further past checkout into a closed loop payments and shopping network. If more transactions start in the Klarna app, run over Klarna cards or bank links, and end with merchant ads and rewards inside the same system, Klarna captures more data, more revenue per user, and more leverage over both merchants and payment rails.