Klarna has also signed a deal with Google to use its Nano Banana, Gemini, and Veo 3 tools. Sandstrom said AI is now embedded in daily work, from analyzing customer reviews to designing ad campaigns. The company has continued hiring AI-focused roles like prompt engineers even as other fintechs scale back. Sandstrom said the company is developing an AI-powered shopping assistant that can find products and complete purchases on behalf of users.
“The more convinced about AI the less we’re measuring the impact of it,” he said.
Market challenges persist
But Klarna’s public market debut comes as its core installment payments business faces pressure. In the U.S., it trails Affirm by about $4 billion in payment volume, according to EMARKETER.
“The Swedish fintech’s critical mistake stateside was its delay in issuing a BNPL-enabled debit card,” said Katherine Smith, payments analyst at EMARKETER. Affirm launched its “buy now, pay later” debit card two years ago, which helped cement its lead in the U.S. market. The card has been central to Affirm’s in-store push, where spending jumped 187% in the fourth quarter of 2024. Klarna only began piloting its own card in June.
Internationally, Klarna remains the stronger player, reporting $25.3 billion in gross merchandise volume—more than double Affirm’s $10.4 billion. It has also scored partnerships with Walmart, DoorDash and eBay, giving it reach Affirm has struggled to replicate.
Still, Smith said card-linked installment plans from traditional banks are an even bigger threat. Credit card issuers like American Express, Chase, and Citi can offer richer rewards than fintechs, which operate on thinner margins. Klarna has tried to counter with cash-back offers and a partnership with rewards startup Nift, but those perks pale in comparison, she added.
Sandstrom said Klarna is carving out a different path, positioning itself with a more consumer-friendly brand that resonates with women, in contrast to what he described as the “male, transactional” approach of rival fintechs.
