Klarna, the global digital bank and flexible payments provider, announced a continued improvement in repayment performance among its extensive consumer base of 100 million.
A significant number of transactions were reportedly repaid “on time or early, across both higher and lower-value purchases, as consumers turn away from credit cards to Klarna’s fairer credit options for more and more of their everyday and big-ticket spending.”
Globally, Klarna’s delinquency rate “on Buy Now Pay Later (BNPL) loans fell to 0.88% for Q2 2025 — a 15 bps improvement from 1.03% in Q2 2024.”
Delinquencies on Klarna’s fixed-term Fair Financing product “fell to 2.18% in Q2 2025, down from 2.20% last year.”
Typically used over 6–12 months for higher-value items “across an increasingly diverse number of sectors like homeware and white goods, this product naturally sees a higher delinquency rate than short-term BNPL.”
Sebastian Siemiatkowski, Klarna CEO and co-founder:
“More customers are paying us back on time or even early, with delinquency rates continuing to decline: proof that our model is working exactly as intended. When you build credit products that are fair, transparent, and designed with the consumer in mind, people make responsible choices.”
As consumer financial health improves, Klarna is experiencing increased demand “for its credit products across the spending spectrum — from Fair Financing for larger purchases to the Klarna Card for everyday spending.”
This trend shows that Klarna’s underwriting approach “continues to make the right decisions for consumers and Klarna’s business.”
As reported recently, Klarna announced that its UK subsidiary, Klarna Financial Services UK (KFSUK) has been “authorised by the UK’s Financial Conduct Authority (FCA) as an Electronic Money Institution (EMI), unlocking the launch of Klarna balance and Klarna cashback for its 11 million UK consumers later this year.”
Live in the US and across 14 European markets, Klarna balance “will allow Brits to hold and manage funds in a Klarna account. Customers will be able to top it up from their debit card, use it to shop with Klarna, receive refunds directly into it, and earn cashback when they shop.”
Klarna Cashback will give consumers “up to 10% back on purchases made through the Klarna app.”
This authorisation was granted “to Klarna Financial Services UK Limited (KFSUK), Klarna’s dedicated UK entity, and builds on the company’s existing UK regulatory permissions.”
It also lays the foundation for future product expansion, strengthening Klarna’s aim to “disrupt traditional retail banking as it becomes an everyday spending and saving partner for consumers.”