European Payments Power Klarna Launches in the U.S. With Overstock.com as a Customer
Jason Del Rey / Re/code :
Context & Ripple Effects
This Re/code report is the origin point of Klarna's U.S. story: a Swedish post-purchase financing provider planting its flag stateside through a single anchor merchant, Overstock.com. At the time, the company's playbook — letting shoppers receive goods before paying — was untested against American checkout habits.
The decade of coverage since shows the bet compounding: Klarna scaled to 93M active consumers and turned its first net profit on $2.81B of revenue in 2024 (revenue up 24% YoY to $2.81B with a $21M net profit), after years when losses widened even as operating income grew (a $167M net loss in 2020 despite $1B in operating income). Distribution came not just from direct merchant signings like Overstock but from embedding inside payments rails via the Stripe partnership for US, UK, and European retailers, later extended globally ahead of a planned IPO.
First-order effects
- Overstock.com becomes one of the first U.S. retailers to offer Klarna's post-purchase financing at checkout, giving Swedish shoppers' pay-later option its American proof point.
Second-order effects
- U.S. checkout incumbents and card issuers face a new financing option competing at the point of sale, pressuring them to match installment-style terms — pressure that later pushed platforms like Stripe to partner with Klarna rather than build around it.
Third-order effects
- If the pattern holds, buy now, pay later shifts from a merchant-by-merchant signing game to infrastructure embedded in global payment processors — which is exactly where Klarna landed with Stripe — while the business model matures from growth-at-a-loss to thin-margin profitability.
The trend: Buy now, pay later is evolving from a European niche service signed retailer-by-retailer into default checkout infrastructure distributed through global payments platforms, with unit economics forcing the sector toward profitability.