Klarna is riding a wave of buy now, pay later (BNPL) popularity in the U.S.
The Swedish payments company said Tuesday (Jan. 17) that America is now its largest market in terms of revenue, with volumes up 92% year over year.
“Despite the challenging macroeconomic environment, we continue to remain laser-focused on investing in our growth in the market to offer valuable shopping and payment services for consumers and be a growth partner for retailers,” a company spokesperson told PYMNTS.
The company has 32 million customers in the U.S., which accounts for more than a fifth of its worldwide user base and represents a 44% increase year over year.
Research by PYMNTS shows that in the past year, 50 million consumers in the U.S. had used BNPL. A separate study found that nearly 60% of consumers were aware of this payment option, even if they have not personally leveraged it, suggesting strong potential growth potential for the installment payment method.
In addition, Klarna has 22,000 retail partners in the U.S. — 71% more than last year — out of 450,000 worldwide.
“We have more of the top 100 US retailers working with us on customer acquisition and marketing than we do for payments,” the spokesperson said, placing the figure at 49 out of 100.
The news came one day after Klarna announced a partnership with payments terminal company Ingenico. Klarna has said it hopes to achieve monthly profits this year following a difficult 2022.
“This isn’t a boat, it’s a container ship,” CEO Sebastian Siemiatkowski told the Financial Times in November. You don’t turn it around in the quarter, it takes some time.”
He added that although the goal is to reach monthly profitability by August or September next year, Klarna could still see a full-year loss in 2023.
The company experienced one of the most high-profile devaluations of 2022 in July after raising $800 million in funding at a $6.7 billion post-money valuation. That came after a massive $639 million financing round the previous June, which valued the company at $45.6 billion.
As for the larger BNPL sector, 2023 could be a “banner year,” as there’s continued demand for “still-healthy spending” by consumers, PYMNTS noted last week in an interview with Ed O’Donnell, CEO of Versatile Credit.
“Consumers are going to become more comfortable as they understand that there’s another option,” O’Donnell told PYMNTS’ Karen Webster, “and buy now, pay later will be a good choice to have.”