Buy Now, Pay Later Startup Klarna Posts Record US Growth

Swedish eCommerce payments platform Klarna is seeing uninterrupted growth, with record-high expansion in new users, retail partners and app downloads.

“Klarna’s accelerating growth is evidence of strong consumer demand for smarter, seamless, and more flexible shopping and purchase experiences,” David Sykes, head of Klarna U.S., said in a Wednesday (Feb. 3) press release.

Sykes said the ongoing effects of the pandemic continue to shift buying behavior, and Klarna users are taking advantage of the ability to shop online anytime and tap interest-free payment options while also getting alerts about price reductions.

“We’re also partnering with thousands of retailers, big and small, to ensure they are ready for a full return to in-store shopping to complement their e-commerce business,” Sykes said.

The current tempo complements the strong year Klarna had in 2020, which saw a doubling of its user base to reach 15 million. More than 1 million new U.S. users have joined the platform every month since October 2020, the company said.

By the end of 2020, the Klarna app topped 3.5 million monthly active users, an increase of 204 percent year over year. The year also closed out with the highest shopping volume in the same month. Some 60,000 new users each day downloaded the app in December — almost  4 million more than its direct competitors. Klarna was also one of the top 10 most downloaded shopping apps in the U.S. during the fourth quarter of 2020, the release indicated, citing Apptopia.

Klarna’s 2020 Holiday Retail Report indicated that some 54 percent of shoppers preferred to shop in stores during the holiday season, compared to 46 percent who would rather buy online. 

The buy now, pay later (BNPL) sector saw a surge amid the pandemic and especially during the holiday shopping season. A survey by PYMNTS and BNPL provider Afterpay earlier in January indicated that online purchases continued to escalate beyond sales at physical stores.