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The Rise of BNPL Giants: Klarna Afterpay Affirm Clearpay and Visa

Klarna: The Fintech Unicorn Company Reinventing Payments

Have you ever wanted to buy something online but didn’t have the funds at the moment? Or have you found the payment process at checkout a bit tedious?

If your answer is yes, then you might want to try out Klarna – a fintech company that provides an innovative “buy now, pay later” payment method. Founded in Stockholm, Sweden, in 2005, by Sebastian Siemiatkowski, Niklas Adalberth, and Victor Jacobsson, Klarna has quickly become a global leader in online payments, reaching a $50 billion valuation.

In this article, we will delve into the details of Klarna’s rise to success, its services, and future plans.

Overview and Services of Klarna

Klarna is a fintech company that offers various payment methods, peer-to-peer payments, and financial services. The company provides a convenient alternative to traditional credit card payments and banking services.

When users make purchases with Klarna, they can either pay outright or choose to “buy now, pay later” in installments, with interest-free options. Moreover, Klarna offers a unique service known as Slice It, where customers can finance their purchases over fixed periods ranging from three to 36 months.

The Slice It option comes with a small fee, but users can build their credit score, and it allows them to make larger purchases without paying upfront. Klarna also offers peer-to-peer payments through its app, where users can send and receive money with friends and family without incurring any fees.

Klarna ensures that users’ financial information is secure, as they use bank-level encryption and continuously monitor accounts for any suspicious activity. Klarna’s Founding and Early Success

Sebastian Siemiatkowski, Niklas Adalberth, and Victor Jacobsson devised the plan for Klarna while they were still in college.

They noticed a gap in the market for a better payment solution that offered a seamless customer experience. With only $200,000 in funding, they launched Klarna in 2005, focusing on providing online shoppers with an easy, hassle-free payment experience.

Despite facing stiff competition from established companies like PayPal, Klarna’s unique approach and services quickly gained popularity. By 2010, Klarna had already established themselves as the leading payment provider in Sweden.

The company continued to receive funding from investors and eventually expanded globally, entering the UK market in 2014, and currently has operations in more than 17 countries. Klarna’s Growth and Expansion

Klarna’s significant breakthrough came when it entered the US market in 2017.

The company’s integration with a variety of retailers allowed them to reach millions of American customers. Within a year, Klarna became a unicron company generating a billion dollars in revenue.

What sets Klarna apart from other payment providers is its business model, which focuses on the customer experience. The company’s customer-centric approach has earned them partnerships with companies such as Mojang, Spotify, King, and Skype.

This approach to business has helped Klarna remain relevant in a highly competitive industry, and it currently has over 90 million active users worldwide. Klarna’s success has not gone unnoticed in the world of finance.

The company plans to go public through a direct listing later this year. It is expected that Klarna’s IPO will result in a $50 billion valuation, making it one of the world’s most valuable fintech companies to go public.

In addition to going public, Klarna aims to continue expanding its services beyond its current offerings. The company intends to venture into banking, provide investment services, and offer a virtual wallet for online transactions.


Klarna is a fintech company that has revolutionized online payments, making it easier, more convenient, and accessible to customers worldwide. Its “buy now, pay later” option, Slice It, and peer-to-peer payment services have all been well-received by consumers, making it a formidable competitor in the industry.

With an expected valuation of $50 billion once it goes public and plans to expand its services, the future looks bright for Klarna. Klarna revolutionized the payment industry with its “buy now, pay later” payment method, but it’s not the only player in the game.

There are several other companies that provide similar services, and in this article, we will highlight Klarna’s top competitors. Additionally, we will be focusing on Afterpay, one of Klarna’s most prominent competitors.

Overview of Klarna’s Competitors in the BNPL Industry

The “buy now, pay later” industry is booming, with several companies seeking to stake their claim in this lucrative market. Klarna’s competitors provide customers the option to pay for their purchases in installments rather than upfront, providing an alternative to traditional credit and debit card payment methods.

Some of the notable competitors in the market include Afterpay,


Sezzle, Visa,

Zip, PayPal’s “Pay in 4,” Splitit, and Clearpay. Each of these companies offers slightly different services to their customers, but the overall premise remains the same – to provide payment flexibility to online shoppers.

Analysis of Top 8 Competitors of Klarna

1. Afterpay:

Afterpay, Klarna’s primary competitor, was founded in Australia in 2014 and has since expanded to the US, the UK, Canada, and New Zealand.

In 2020, the company merged with Touchgroup, a European payments company.

Afterpay’s payment method allows customers to split their purchases into four installments with zero-interest fees.

The company ensures that its users have high credit scores and minimal credit delinquency rates. According to the company’s annual report, Afterpay generated AUD 924.7 million ($675 million) in revenue in 2020 and has over 11 million active users and partnerships with over 86,100 its merchants.



Affirm, founded in 2012, provides customers with payment flexibility at the point of sale. The company allows customers to split their payments over a period of 3, 6, or 12 months, with interest fees starting from 0%.

Affirm also provides loans to users to finance their purchases. It raised nearly $1 billion in its initial public offering in January 2021.



Sezzle offers a “pay-over-time” payment option that splits a customer’s purchases into four installments, with no interest or fees. The company reported in its 2020 annual report that it delivers over 31,000 active merchants serving over 2.6 million customers in the US and Canada.

4. Visa:

Visa’s installment option offers customers the ability to split their payments into four equal payments on purchases up to $100.

For purchases over $100, Visa provides customers with several installment options, with interest fees at an APR of 12.9%. 5.


Zip, an Australian company, offers customers the option to pay in four installments over eight weeks, with no interest fees or credit checks.

Zip has recently expanded to the US and UK in July 2021.

6. PayPal’s “Pay in 4”:

PayPal’s “Pay in 4” allows customers to split their purchases into four installments over six weeks.

The company charges zero interest fees for purchases of up to $600, with late fees up to $10. 7.


Splitit allows customers to pay for their purchases using the credit limit on their existing credit cards. Splitit doesn’t require customers to apply for a new line of credit, undergo a credit check, or enter into a finance agreement.

8. Clearpay:

Clearpay allows users to pay for their purchases in four interest-free installments, similar to the other BNPL companies.

Clearpay has over 100,000 active users, primarily based in the UK and the US.


Klarna may be the trailblazer when it comes to “buy now, pay later” payment methods, but it’s not the only game in town. Companies such as Afterpay,


Sezzle, and others have built their empires on this payment model.

By providing customers with a payment flexibility, BNPL service providers have made online shopping more convenient and accessible to everyone. Online shoppers can now make purchases without worrying about upfront payment and time constraints, while also enjoying more accessible lines of credit and minimal interest fees.

The future is bright for the “buy now, pay later” industry, and there is undoubtedly room for competitors to coexist, giving consumers more options and flexibility when it comes to online shopping. As the world becomes more digitally focused, consumers are looking for new and convenient ways to make purchases online.

The “buy now, pay later” payment model has helped to meet this demand, with companies such as

Affirm and

Sezzle providing flexible payment options to millions of customers.


Launched in 2012 by Max Levchin, co-founder of PayPal,

Affirm offers customers an alternative to traditional credit cards. Levchin’s vision was to create a new type of lending platform that would make it easier and more convenient for consumers to obtain loans.

He launched

Affirm under his vehicle, HVF, and Expedite, giving it the use of his assets.

Affirm’s platform provides customers with credit terms at the point of sale, allowing them to pay for purchases in installments. This alternative allows consumers to build their credit scores, avoid high-interest fees, and make larger purchases without the risk of accruing debt.

Affirm has also partnered with several merchants to offer its PayBright service, which allows customers in Canada to split their purchases into four interest-free payments. The company has reported revenues of $509 million and counting, with an estimated 5.6 million active users as of June 2021.

In January 2021,

Affirm went public with shares rising 110% within the first two days of trading, establishing itself as a leading fintech company.


Founded in 2016 by Charlie Youakim,

Sezzle is a digital lender that offers payment flexibility to consumers. The company uses an ACH payment platform that allows them to transfer funds between banks, allowing consumers to split their payments into four easy installments – two of which are paid upfront.

This option provides financial flexibility and convenience to users without incurring high-interest fees.

Sezzle began operations primarily in the North American market, starting with Canada and later expanding to the US, serving more than 2.6 million customers and over 31,000 merchants by the end of 2020. The company reported that its transaction volume grew by more than 550% YoY as of Q1 2021, adding approximately 96,000 new active buyers in the first quarter alone.

As of June 2021,

Sezzle reported that it raised $100.8 million in funding, and it plans to expand its payment services soon. In May 2021, the company announced its interest in entering the European market, which would significantly broaden its operational footprint.


The BNPL industry is growing rapidly, providing people with more payment options and convenience.

Affirm and

Sezzle have both made a significant impact on this space, and each continues to gain momentum as more people opt to purchase products using their services.

Affirm gives consumers the option to make purchases at the checkout with favorable credit terms, while

Sezzle provides an easy payment installment plan for items purchased online. Both companies rely heavily on partnerships with merchants to build their user bases and improve industry penetration.

As the competition in the BNPL space continues to grow, it will be exciting to see how


Sezzle, and other companies develop new technological solutions and adapt to meet the ever-changing needs of their customers. Visa, known for its ubiquitous EFT and ATM cards, has made its foray into the “buy now, pay later” industry with the introduction of Visa Installments.

Leveraging its extensive network and partnerships, Visa aims to provide customers with flexible payment options and further solidify its position as a leading payment technology company. Visa’s Entry into the BNPL Industry with Visa Installments

Visa Installments is Visa’s response to the growing demand for alternative payment methods in the eCommerce space.

The service allows customers to split their payments into smaller, more manageable installments, providing an alternative to traditional credit card payments. With its extensive network of partner merchants, Visa Installments offers consumers the flexibility to choose a payment method that suits their financial needs.

By partnering with BNPL providers, Visa aims to expand its reach and offerings in the “buy now, pay later” industry. This strategic move allows Visa to tap into the increasing popularity of installment payment options, enabling its customers to make purchases conveniently while keeping their finances in check.

The service also provides consumers with access to attractive loan terms, potentially reducing the overall cost of borrowing. Visa’s Financial Performance and Expansion

Visa’s financial performance speaks to its success and dominance in the payment industry.

In its latest financial report, Visa reported a total transaction volume of $12.4 trillion, generating net revenues of $23 billion. The company’s partnerships with various financial institutions, merchants, and technology companies have played a crucial role in its global expansion and revenue growth.

Visa continues to expand its network of partner merchants, ensuring that customers have access to Visa Installments across various industries. This widespread adoption of the service further solidifies Visa’s position in the “buy now, pay later” market.

With millions of merchants accepting Visa cards worldwide, the company has the infrastructure and resources to scale its BNPL offerings effectively. Additionally, Visa’s global workforce has grown to over 21,000 employees, reflecting its commitment to innovation and customer satisfaction.

The company invests heavily in research and development to enhance its payment solutions and continually improve customer experience. This investment contributes to Visa’s continued success and expansion in the competitive payments industry.


Zip, officially known as

Zip Co Limited, is an Australian BNPL company that has made significant strides in the market. Through strategic acquisitions,

Zip has expanded its suite of offerings and solidified its presence both locally and internationally.

With the acquisition of QuadPay in the United States,

Zip was able to enter the American market and tap into its vast consumer base. QuadPay, a leading BNPL provider, brought expertise and a strong customer following to

Zip, enabling the company to expand its services effectively.

Zip’s expansion didn’t stop there – the company also acquired ThinkSmart Ltd, a UK-based BNPL provider, and Pocketbook, a personal finance management app.

Zip’s Features and Financial Statistics

Zip offers customers the opportunity to make purchases and pay for them later, interest-free. By spreading payments over four installments,

Zip customers enjoy the convenience of flexible financing without the burden of high-interest fees.


Zip does not require credit checks, making it accessible to a wide range of customers. In terms of financial statistics,

Zip reported $102.1 million in revenue for the first half of the 2021 financial year, representing a 96% increase from the previous year.

The company’s active customer base has also grown significantly, reaching over 7 million users by the end of 2020.

Zip’s partnerships with more than 48,000 retailers worldwide contribute to its strong performance and expanding customer base.

Zip has secured significant funding to support its expansion plans. In March 2021, the company raised $400 million, a testament to its growth potential and investor confidence.

This funding will enable

Zip to drive innovation, expand its offerings, and enter new markets, further solidifying its position as a leading BNPL provider.


Visa’s entry into the BNPL industry through Visa Installments demonstrates the company’s commitment to innovation and meeting the evolving needs of its customers. By leveraging its extensive network and partnerships, Visa aims to provide consumers with flexible payment options and ensure a seamless payment experience.


Zip has made its mark in the BNPL industry with its interest-free payment solutions and strategic acquisitions. With its expanding customer base, strong financial performance, and international presence,

Zip is well-positioned for future growth and success.

Both Visa and

Zip exemplify the shifting landscape of payment solutions and the increasing demand for alternative payment methods. As the BNPL industry continues to evolve, companies like Visa and

Zip are driving innovation, reshaping the way consumers make purchases, and transforming the traditional payment landscape.

PayPal’s “Pay in 4” has made significant strides in the “buy now, pay later” industry, offering customers a convenient and flexible payment solution through its popular digital wallet. Additionally, Splitit has carved out a niche in the industry with its unique card-based service, focusing on providing businesses with alternative payment options.

PayPal’s Entry into the BNPL Market

PayPal, a renowned digital payment platform, entered the “buy now, pay later” market with its offering, “Pay in 4.” Leveraging its established user base and widespread acceptance, PayPal introduced this service to provide customers with flexible payment options. With “Pay in 4,” customers can split their payments into four equal installments, paid every two weeks, interest-free.

PayPal’s BNPL Features and Limitations

“Pay in 4” offers customers an attractive alternative to traditional payment methods, allowing them to budget their purchases effectively. By breaking down payments into smaller increments, customers can manage their finances without incurring interest fees.

However, it’s worth noting that “Pay in 4” is currently only available to customers in select regions, primarily the United States. Despite its regional limitations, “Pay in 4” has seen substantial success.

In the first quarter of 2021, PayPal reported that transaction volume for its BNPL offerings grew by 55% year-over-year, reaching $1 billion. The company’s partnerships with leading retailers, such as Nike and Best Buy, contribute to its strong presence in the market and its ability to serve a wide range of customers.

Splitit’s Business-to-Business Focus and Services

Unlike many other BNPL providers, Splitit offers a unique card-based service with a focus on the business-to-business (B2B) market. Rather than targeting individual consumers, Splitit enables businesses to provide payment installment options to their customers.

This service is particularly beneficial for suppliers that work with larger business clients, allowing them to offer flexible payment terms without the need for credit checks or additional financing. Splitit’s Financial Performance and Unique Features

In terms of financial performance, Splitit experienced significant growth in recent years.

The company reported $4.9 million in revenue for the first quarter of 2021, reflecting a 179% increase compared to the same period in the previous year. Splitit’s unique card-based service sets it apart from other BNPL providers, as it allows customers to use their existing credit cards without the need for additional applications or credit checks.

Splitit’s solution caters to both shoppers and merchants. Shoppers can enjoy interest-free payment plans, extended credit terms, and the ability to make large purchases without relying on new credit lines.

Merchants benefit from increased sales and conversions, reduced cart abandonment rates, and improved cash flow.


PayPal’s “Pay in 4” and Splitit offer unique solutions in the BNPL industry, catering to different segments of the market. PayPal’s entry with “Pay in 4” leverages its strong position as a widely recognized digital wallet, providing users with a convenient and flexible payment option.

Splitit, on the other hand, focuses on the B2B market, serving businesses that want to offer their customers installment payment options using existing credit cards. Both PayPal’s “Pay in 4” and Splitit contribute to the transformation of the payment landscape, addressing the evolving needs and preferences of consumers and businesses.

With the continued growth and popularity of BNPL services, these companies are poised for further success and industry influence as they revolutionize the way people make purchases and manage transactions. Clearpay is a leading player in the “buy now, pay later” industry, offering consumers a flexible and interest-free payment option for their online purchases.

Afterpay, one of Klarna’s competitors, acquired Clearpay in 2018, propelling its growth and expansion, particularly in the UK market. Clearpay’s Acquisition by Afterpay and Growth in the UK

Afterpay’s acquisition of Clearpay opened doors for the latter to expand its services both domestically and internationally.

The acquisition allowed Clearpay to leverage Afterpay’s global network, expertise, and resources to enhance its offerings and presence in the market. Additionally, the acquisition provided both companies with the opportunity to tap into new customer bases and drive further growth.

Clearpay’s primary focus was in the UK market, where it emerged as a significant player in the BNPL space. With the acquisition of ThinkSmart Ltd., a UK-based BNPL provider, Clearpay solidified its position in the UK by acquiring a company that had established partnerships with numerous retailers.

This strategic move allowed Clearpay to extend its reach and provide its services to an even wider range of consumers in the UK. Clearpay’s Features and Market Presence

Clearpay offers consumers a convenient and interest-free way to split their purchases into four repayments, paid over six weeks.

Customers are not required to undergo credit checks to use Clearpay, making it accessible to a broader range of users. Clearpay allows retailers to offer installment payment options to their customers without taking on the risk or responsibility of credit approvals and collections.

Clearpay has quickly gained market share and achieved significant success since its launch. In its financial year 2020, Clearpay reported a transaction volume of over 2.7 billion, reflecting its rapid growth and increasing popularity among consumers.

The company’s active users have also continued to grow, reaching approximately 13.1 million customers by the end of 2020. Clearpay has partnered with numerous well-known merchants, including Asos, boohoo, and JD Sports, further bolstering its market presence and expanding its customer base.

Clearpay’s success is not limited to the UK market. The company has expanded its operations globally, establishing a presence in the United States, Canada, Australia, and New Zealand.

This expansion has opened up new opportunities for Clearpay, allowing the company to tap into international markets and serve a broader customer base.


Clearpay’s acquisition by Afterpay and subsequent expansion in the UK market have cemented its position as a key player in the “buy now, pay later” industry. With its interest-free installment payment options and accessible services, Clearpay has resonated with consumers and provided them with a flexible and convenient alternative to traditional payment methods.

As Clearpay continues to expand its operations globally and forge partnerships with leading retailers, the company’s market presence and user base are set to grow even further. By offering a seamless and accessible payment solution, Clearpay is well-positioned to cater to the evolving needs and preferences of consumers, driving the ongoing transformation in the way people shop and make payments.

The “buy now, pay later” industry has experienced significant growth and transformation, with companies like Klarna, Afterpay,

Affirm, and Clearpay leading the way. These companies offer innovative payment solutions that allow customers to split their purchases into interest-free installments, providing convenience and flexibility.

Additionally, Visa has entered the market with its Visa Installments, catering to customers’ evolving payment needs. Splitit focuses on providing businesses with alternative payment options.

The growth and success of these BNPL providers demonstrate the changing landscape of payments and the increasing demand for flexible and accessible payment solutions. As the industry continues to evolve, these companies will play a vital role in reshaping the way people make purchases and manage transactions, making shopping more convenient and accessible for everyone.

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