Klarna has secured a significant partnership with Walmart, replacing Affirm as the exclusive provider of buy now, pay later (BNPL) services for the retail giant in the U.S. This strategic move, announced March 17, 2025, comes as Klarna prepares for its highly anticipated IPO, positioning it to capitalize on Walmart's massive customer base of 255 million weekly shoppers.
Key Details of the Partnership
- Integration: Klarna will power installment loans through Walmart-backed fintech app OnePay, offering repayment terms from 3 to 36 months with interest rates ranging from 10% to 36%. The service will launch in the coming months and expand to all Walmart channels by late 2025.
- Scope: Customers can use Klarna’s BNPL options both in-store and online, with OnePay managing the user interface and Klarna handling loan underwriting.
- Exclusivity: The deal displaces Affirm, which had partnered with Walmart since 2019. Affirm’s stock fell 8–11% on the news.
Impact on Klarna’s IPO Prospects
- Market Expansion: The partnership strengthens Klarna’s U.S. presence, potentially increasing its loan volume and brand recognition ahead of its public offering. Walmart represents Klarna’s largest U.S. retail partnership to date.
- Financial Momentum: Klarna reported a $21 million net profit in 2024, reversing a $244 million loss in 2023. Analysts suggest the Walmart deal could help Klarna achieve its targeted $15 billion valuation during its IPO.
- Competitive Edge: The move intensifies Klarna’s rivalry with Affirm, which derived 5% of its gross merchandise volume from Walmart. Klarna now gains access to a critical distribution channel as it seeks to dominate the BNPL sector.
Broader Implications
- Consumer Debt Trends: The partnership arrives as U.S. credit card debt hits a record $1.7 trillion, highlighting growing demand for flexible payment options.
- BNPL Market Dynamics: Klarna’s focus on transaction-based revenue (vs. Affirm’s emphasis on marketing partnerships) could reshape industry strategies.
This deal marks a pivotal moment for Klarna, leveraging Walmart’s scale to solidify its position in the competitive BNPL landscape while boosting investor confidence ahead of its IPO.
Sources: TechCrunch, Finovate & Investor's Business Daily
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