Klarna Expands Deposits and Debit Push as GMV Hits $33.7 Billion

Consumers leaning on buy now, pay later for everything from groceries to larger-ticket purchases helped push Klarna deeper into everyday spending during the first quarter, while deposits, debit usage and point-of-sale financing increasingly are part of the company’s growth story.

The company on Thursday (May 14) reported first-quarter revenue of $1 billion, up 44% year over year, while gross merchandise volume rose 33% to $33.7 billion. The earnings presentation also showed active consumers rising 21% to 119 million and merchants increasing 49% to 1.1 million.

Klarna CEO Sebastian Siemiatkowski said the company’s strategy centers on building a broader payments ecosystem that stretches beyond traditional BNPL.

“We are still spend-centric not lend-centric,” Siemiatkowski said on the earnings call. “Pay later means we start small with every new customer. A $100 transaction repaid in weeks. That’s how we get to know each other.”

The company said it is now live with the majority of the top 100 online retailers in the United States, where Klarna has increasingly pushed its “fair financing” installment product. Executives said most borrowers using those longer-duration installment loans are existing customers with established repayment histories.

Klarna’s U.S. business remained a key growth engine during the quarter. GMV in the United States rose 39% to $7.1 billion, representing 21% of total GMV. Revenue in the market climbed 67% to $399 million.

The company’s fair financing business, tied to its point-of-sale installment offering, generated $4.1 billion in GMV during the quarter, up 138% year over year. Klarna said 225,000 merchants now offer the product, compared to 103,000 a year earlier.

Everyday Spending

Management added that the company is trying to achieve parity and ubiquity with traditional payment networks by offering payment methods suited for different merchant categories including subscriptions, groceries, ridesharing and airlines.

That strategy also appeared in the company’s debit and card business. The company has detailed that card product surpassed 5 million users globally during the quarter. Siemiatkowski said debit usage on the card has been stronger than expected.

“What I’m particularly pleased about with the card is obviously its high growth,” he said. “The additional thing that I find interesting and happy about as well is that the debit side of the card is stronger than we initially expected.”

Klarna executives said the card is becoming part of consumers’ everyday spending habits, helping deepen engagement with the app while creating additional cross-selling opportunities.

Chief Financial Officer Nicholas Neglén said membership fee revenue tied to the card business increased more than 600% year over year during the quarter. He added that card users transact roughly three times more frequently than non-card users and generate materially higher revenue over time.

The broader engagement push is also feeding Klarna’s banking and deposit operations. Siemiatkowski said 91% of the company’s funding base now comes from consumer deposits with an average duration of 270 days.

“Everyday spend feeds the deposits. Deposits fund the originations,” he told analysts.

Credit Quality Holds Steady

Despite broader concerns about consumer health and pressure on lower-income households, Klarna executives said delinquency trends remained stable.

Neglén said 30-day-plus delinquency rates in Klarna’s pay-later portfolio remained “stable and well managed,” while delinquency rates in the fair financing portfolio declined sequentially. The company’s earnings presentation showed charge card equivalent delinquency rates at 1.6% for 30-plus days past due and 0.9% for 60-plus days past due.

Executives attributed that performance to the company’s short-duration lending structure and transaction-level underwriting model.

Management also discussed its emerging agentic commerce strategy during the call, framing Klarna as a payment layer inside AI-driven shopping experiences.

“Agentic commerce needs three things and we own all three of those. That’s trust, data and transaction layer,” Siemiatkowski said.

He pointed to integrations with Google Pay inside Gemini and Klarna’s position within Stripe Link as examples of how the company is trying to secure a place inside future AI-driven purchasing flows.

Looking ahead, Klarna reiterated its full-year guidance, including GMV above $155 billion and adjusted operating income above 6.9% of revenue.

Shares surged 16% in early trading on Thursday.