For Klarna’s entire 20-year history, the company has been obsessed with making it easy for customers to pay on terms that work for them. That was true for its signature “Pay in 30” option in the early days of ecommerce, and it remains the case today as Klarna offers payment options including buy now, pay later and “Pay in full,” which lets shoppers pay instantly through a bank transfer, card, or debit payment.

“We’re always thinking about the entire customer journey,” said Victoria Watmough, Klarna’s head of distribution partnerships.

Since 2019, Stripe has supported Klarna’s growth by supplying global payment processing technology as well as virtual card issuing capabilities that facilitate Klarna’s payouts to businesses. Stripe also makes Klarna available as a payment method to Stripe users, including adding a smooth Klarna experience on Link, a wallet built by Stripe. Last year, Stripe and Klarna expanded their strategic partnership, greatly increasing the number of businesses that offer Klarna and providing customers with even more ways to shop and pay.

As a result, Stripe-powered businesses in 25 countries can now add Klarna instantly as a payment method in their checkout flows. This expanded partnership helped to double the number of new businesses offering Klarna for the first time in the fourth quarter of 2024, compared to average quarterly business adoption.

Klarna and Stripe drive conversion with BNPL

Today, more than 200,000 businesses have enabled Klarna on Stripe, and many are seeing impressive results. Customized apparel maker INDOCHINO, for example, reported an overall lift in sales volume and a 16% increase in average order value after making Klarna available at checkout and showcasing Klarna’s flexible payment options throughout the shopping journey.

OrderMyGear, a platform for users to sell branded merchandise, experienced an even more significant result: a 67% increase in average order value after implementing Klarna as a checkout option—with Klarna paying OrderMyGear in full, up front, while giving customers the option to pay over time.

“By allowing users to seamlessly add Klarna, Stripe is opening Klarna up to millions of small- and medium-sized businesses,” said Watmough. “We’ve traditionally been associated with retail categories like fashion, beauty, and electronics. While we’ve already been growing outside of those verticals, Stripe will help us accelerate that growth and diversify the merchants and consumers we’re reaching.”

Other types of verticals now using Klarna through Stripe include entertainment ticketing platforms, travel and hospitality businesses, healthcare providers, and auto-related businesses. On the white-label ticketing platform TicketSocket, the average purchase made through Klarna—more than $800—represents nearly double the average order value seen with other payment methods.

Cloud-based auto shop management platform Tekmetric implemented Klarna as a buy now, pay later option so car owners facing costly emergency repairs can break the cost into several smaller payments. Average order volumes have tripled for auto shops on Tekmetric that have enabled BNPLs.

Thanks to a full upgrade of Klarna’s API, the version of Klarna accessed by businesses on Stripe is equivalent to a direct integration. That means conversion-boosting features such as Klarna Express checkout and on-site messaging, which are popular with both customers and retailers, are available for the first time in a third-party integration. Klarna also rebuilt its onboarding API, providing Stripe with more holistic end-to-end retailer management—including dispute management and offboarding.

“Stripe is making it easier for businesses to meet their customers where they are, driving conversion, loyalty, and innovation in the checkout experience,” said Alexis Zhu, head of strategic payment methods at Stripe. “With this Klarna API upgrade, businesses get access to Klarna’s full feature offering and the fastest Klarna integration available anywhere.”

Strong partnership supports global expansion

That speedy integration is courtesy of Stripe’s Optimized Checkout Suite, which uses AI models to determine which payment methods to display, and in what order, for each individual checkout. This real-time optimization directly translates to increased revenue, as more customers are more likely to use their preferred payment options to complete purchases.

In fact, Stripe’s ease of integration, robust security, global reach, and comprehensive support have helped drive Klarna’s expansion over time. During times of increased shopping volume—for example, Black Friday or Cyber Monday—Klarna relies on Stripe Payments’ 99.999% uptime to support the traffic. “When there are flash sales or big holidays, we need to be working with the best technology partners, like Stripe,” said Watmough. “We know their tech can withstand the demand we expect during those periods.”

Klarna, which is a fully licensed bank, uses Stripe Issuing to offer physical and virtual credit cards in several markets—enhancing its reputation for flexibility in payment methods. The company also uses Stripe Financial Connections, which allows customers to securely share financial data and bank account details, so that businesses can determine whether those seeking to use their BNPL products are an appropriate risk. “To have one partner who can fulfill all these needs under one roof, as well as distribution, provides so much benefit,” said Watmough.

Looking ahead, Klarna aims to expand into more new markets. One piece of the puzzle will be allowing customers to transact across currencies, so they can shop with Klarna wherever they are. Klarna’s vision is that everywhere Visa, Mastercard, and PayPal are available, Klarna will be available as well—supported by Stripe’s offering of over 100 payment methods and ability to sell in more than 195 countries.

Klarna and Stripe have also been engaging in joint development and testing of new features, aiming to improve conversion rates for users and enable more ways for customers to pay with Klarna. With more than a decade of productive collaboration between them, the partnership has advanced far beyond a traditional tech vendor relationship into a powerful payment solutions team that serves everyone from small- and medium-sized to enterprise businesses.

“It’s really valuable to be a part of the Stripe ecosystem,” said Watmough. “Our teams are leveraging each other’s skills as we continue to innovate, grow, and jointly reach new markets, businesses, and consumers.”