23-05-2025
'Buy now, pay later' service Klarna reveals losses as some shopaholics refuse to settle up loans
Swedish fintech company Klarna is now grappling with some financial losses as customers fall behind on loan repayments.
The 'buy now, pay later' service is popular for allowing shoppers to split payments into interest-free chunks, but the model is now under scrutiny as some users are unable or unwilling to pay back what they owe.
While Klarna's user base showed impressive growth in the first quarter, its net loss for the first three months of 2025 was $99 million, they revealed in their latest earnings report.
Its first-quarter consumer credit losses hit $136 million, marking a 17 per cent increase compared to last year.
A Klarna spokesperson told that the increase in losses was 'proportional to Klarna's overall growth in business volume.'
They also stressed that in the US, 'delinquency rates are the same they were a year ago.'
People online reacted hilariously to the news, with some shopaholics joking that they may have contributed to the company's losses.
'I feel so damn guilty. I'm bout to pay them this $143.26,' wrote one.
A second said, 'I'm glad they denied me. They would've been $136.2 million in debt.'
'Well it ain't me! They keep increasing my purchase power and I'm here for it,' gushed another.
'Let me go lay the $72.92 I owe them and help them out a lil bit,' a fourth wrote.
One said, 'Let me go ahead 'n order something before they file bankruptcy lol.'
Another joked, 'It looks like Klarna needs to sign up for After Pay!'
One responsible spender wrote, 'You gave credit to people that didn't qualify for credit and you expected them to pay you?!'
Klarna CEO and co-founder Sebastian Siemiatkowski said he was happy with the company's 'undeniable momentum' in a gushing statement issued in their earnings report.
'Klarna has reached 100 million consumers and secured exclusive partnerships with major retailers like Walmart through OnePay, teamed up with DoorDash, and expanded our partnership with eBay to the U.S. after multiple successful European launches,' he said.
'Our AI-first strategy is driving exceptional returns, we're outpacing competitors, our merchant network is scaling rapidly, and our next-gen products are reshaping money management for millions.'
A quarter of American adults are using 'buy now, pay later' services for grocery shopping, according to a disturbing new poll that suggests a recession is looming.
A survey of 2,000 adults by loan company Lending Tree also discovered that 41 percent of people who used buy now, pay later services for groceries had missed a payment deadline - seven percent more than the year before.
The data, first reported by CNBC, points to impending economic doom as millions of ordinary Americans buckle under the weight of soaring grocery prices, with inflation still untamed.
Major supermarkets including Kroger, Shaw's, Ralphs and Whole Foods let customers pay using the most popular buy now, pay later service - Klarna.
Instacart, which lets users order groceries through an app which are then delivered to their home also offers Klarna as a payment option.
Klarna, which started in Sweden in 2005, lets users split the cost of a payment into four payments which must be completed within 30 days.
Doing so avoids interest charges and is the main reason many people use services like Klarna instead of credit cards.
