The news: Klarna expanded its distribution partnership with Stripe, making the buy now, pay later (BNPL) option available to merchants in 26 countries, per CNBC. Stripe merchants will be able to A/B test the impact Klarna has on their conversion rates.

As part of the new deal, Stripe will get a share of the fees that Klarna makes from each transaction.

How we got here: Klarna has been available to Stripe merchants in a limited capacity since 2021. The two payment companies have also worked together on other ventures, including the checkout business that Klarna sold to investors in October.

Why it matters: Stripe’s expansive merchant network can help Klarna with its goal of being on every checkout page.

Working with a payment provider like Stripe also means Klarna doesn’t need to make individual merchant partnerships, which can be costly and time-consuming. This is a growth strategy Klarna has been pushing in recent months: It became a default payment option on Worldpay in October and on WooCommerce earlier this month.

Our take: This tie-up can help give Klarna a payments volume boost ahead of its long-awaited IPO. We expect Klarna’s US payment value will total $30.42 billion in 2025, per our forecast.

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