Swedish buy now, pay later giant KlarnaKLAR

is set to begin trading on the NYSE today, seeking a $15B valuation — a remarkable recovery from its 2022 low of $6.7B but still far below its pandemic peak of $45.6B. The company is trying to convince investors it’s more than just a buy now, pay later (BNPL) firm, repositioning itself as a digital bank ready to take on JPMorgan ChaseJPM

and PayPalPYPL

.

I’m a bank, trust me: In the US, Klarna struggles with the perception that it’s only a BNPL service, unlike in Europe, where consumers use it more like PayPal. To shift that image, the company is building what CEO Siemiatkowski calls a “digital financial assistant” powered by artificial intelligence that can negotiate better interest rates and insurance premiums for customers.

• Klarna has ventured into savings accounts, insurance products, and even mobile phone plans — all delivered through its app with budgeting tools, cashback rewards, and investment options.
• It recently launched mobile phone plans in the US for $40 a month through a partnership with telecom startup Gigs, following similar moves by rivals Revolut and N26.

In America, It’s Called Affirm

Klarna previously tried to become a super app with multiple features but found it “confusing for the customer.” This diversification push comes as it faces an uphill battle against rival Affirm HoldingsAFRM

, which has surged 132% over the past year and boasts faster growth rates despite generating similar revenue amounts.

• In recent quarters, Klarna pulled in $823M while Affirm earned $876M — but Affirm’s 33% growth rate significantly outpaced Klarna’s 21%.
• The average Klarna purchase sits at $101 compared to Affirm’s $276, suggesting Klarna is stuck in the lower-margin, smaller-ticket territory that’s harder to monetize profitably.

Profitability concerns: With a net loss of $152M in the first six months of 2025, Klarna’s CEO has been doubling down on AI to cut costs — sparking controversy in the process. After initially claiming that AI was doing the work of 700 customer service agents, Siemiatkowski reversed course and began hiring humans again, admitting the cost-cutting focus had led to “lower quality” service. Critics are also worried that Klarna is targeting financially stressed populations just as student loan payments resume and economic headwinds persist.