Fintech Powerhouses Unite: Klarna and Stripe Join Forces
In a significant move to expand their reach and merchant base, Klarna, a leading buy now, pay later (BNPL) service provider, has partnered with Stripe, a prominent fintech company. This strategic alliance will make Klarna’s BNPL service available as a payment option for merchants using Stripe’s payment tools in 26 countries.
A Win-Win for Both Firms
This partnership is not the first between the two companies. In 2021, Stripe announced that Klarna would offer its BNPL plans to its merchants. The new agreement gives Klarna a substantial boost as it prepares for its highly anticipated initial public offering (IPO) in the United States. Klarna’s valuation could reach as high as $20 billion, according to reports.
How the Partnership Works
Klarna generates revenue from fees paid by retailers on each transaction processed through its platform. In return, Stripe will receive a share of the revenue generated from each transaction. Although the financial terms of the deal remain undisclosed, the partnership is expected to drive incremental revenue gains for both companies.
Boosting Merchant Acquisition and Revenue
Since implementing the new integration with Stripe in October, Klarna has already doubled its number of new merchants. The company expects this growth rate to increase with the agreement. Analysts value Klarna, founded in 2005, at around $15 billion. During the pandemic-led surge in fintech stocks, the company’s valuation peaked at $46 billion.
The Rise of BNPL
BNPL arrangements have become increasingly popular, allowing consumers to spread the cost of everyday purchases. A study by Stripe found that businesses offering BNPL as a payment method generated up to 14% more revenue from increased conversion and higher average order values. With this partnership, both companies are poised to capitalize on the growing demand for BNPL services.
A Bright Future Ahead
As Klarna prepares for its IPO, this partnership with Stripe is a significant step forward. The deal has the potential to drive growth, increase revenue, and expand the reach of both companies. With the fintech industry continuing to evolve, this alliance is a testament to the power of collaboration and innovation in the space.
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