Klarna Gets a Jolt From Its Payment Card

Why It Matters

The card’s rapid adoption deepens customer engagement and creates a high‑margin revenue stream, strengthening Klarna’s position in the competitive BNPL market. It also validates the strategic shift toward in‑store financing, a growth frontier for the industry.

Key Takeaways

• Klarna Card users exceed 5 million, driving higher fees and ARPU.
• Card members generate 4× revenue per user after six months.
• Membership fees rose >600% YoY, boosting Q1 profitability.
• BNPL in‑store market projected 32% CAGR 2025‑2030, expanding growth runway.

Pulse Analysis

Klarna’s flagship Klarna Card has become a pivotal growth engine, crossing the 5 million‑user threshold in the first quarter. The card not only adds a recurring membership fee—up more than 600% year‑over‑year—but also lifts average revenue per user (ARPU) to roughly four times that of non‑card customers after half a year. This dual‑track model, combining fee income with higher spend, helped the neobank deliver $1 billion in revenue, a 44% jump, and reverse a $99 million loss from the prior year into a modest profit. The surge underscores how a well‑integrated card can transform a BNPL platform’s economics.

Beyond the balance sheet, the Klarna Card deepens data collection and consumer engagement, giving the company richer insights into spending patterns across both online and brick‑and‑mortar channels. Analysts note that cards are essential for BNPL providers seeking to penetrate in‑store commerce, a market estimated to be four times larger than e‑commerce. With a projected 32% compound annual growth rate for in‑store BNPL volumes from 2025 to 2030, Klarna’s card strategy positions it to capture a sizable share of this untapped space, while also feeding its funding base through everyday spend deposits.

Financially, Klarna’s Q1 rebound restored investor confidence after a volatile fourth quarter marked by higher provision costs. Revenue growth was broad‑based, with Pay Later GMV up 29% and Fair Financing soaring 138% as merchants adopt longer‑term installment options. The company kept its full‑year guidance unchanged, though analysts consider it conservative, suggesting upside potential if macro conditions hold. As the card continues to drive higher engagement and margin expansion, Klarna is poised to leverage its growing user base to sustain momentum in a rapidly evolving payments landscape.