Klarna Stakes Its Claim Across 14 European Markets With In-Store Tap to Pay

Klarna’s European Expansion Creates New Revenue Streams

The flexible-payment sector is witnessing a pivotal shift toward omnichannel retail experiences. Klarna Group plc KLAR has capitalized on this trend by deploying its Tap to Pay functionality across Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands, Norway, Poland, Portugal, Spain, and Sweden. This move represents a strategic play into the €2+ trillion European retail market, where traditional brick-and-mortar venues still account for over four-fifths of all consumer spending.

The implementation leverages near-field communication (NFC) technology to convert the Klarna app into a mobile checkout solution. Shoppers can now activate installment payment arrangements directly at physical point-of-sale terminals with a single tap, bridging the gap between digital-native payment flexibility and in-store convenience. This capability builds upon the traction generated by Klarna’s proprietary card offering—a debit-first payment instrument now active among 4 million cardholders. Through Visa’s infrastructure, this card gains acceptance at more than 150 million merchant endpoints worldwide, expanding Klarna’s utility across geographies.

Market Momentum Indicators Support Growth Thesis

Klarna’s operational metrics paint a picture of accelerating adoption. The platform now serves 114 million active users globally and processes 3.4 million transactions daily—metrics that reflect both breadth and frequency of engagement. The company’s Black Friday 2024 results further underscore momentum: gross merchandise volume surged 45% year-over-year through late November, with particularly strong performance in footwear, technology, personal care, and home categories. These gains occurred within the intensely competitive U.S. market, signaling Klarna’s ability to capture share among digitally-oriented consumers.

Intensifying Competition in the Buy-Now-Pay-Later Sector

Klarna’s expansion strategy unfolds amid rising competitive pressures. Affirm Holdings, Inc. AFRM has built traction through frequent engagement products (Pay in 2, Pay in 30 options) and is expected to extend its European presence via anticipated Shopify integrations in France, Germany, and the Netherlands. Meanwhile, PayPal Holdings, Inc. PYPL maintains unmatched scale, operating across 200+ markets and projecting $40 billion in buy-now-pay-later transaction volume by 2025.

Klarna’s strategy centers on optimizing both online and offline purchase flows to capture greater wallet share as BNPL adoption accelerates among younger, tech-comfortable demographics.

Valuation Concerns Temper Recent Performance

Klarna’s stock has retreated 19.6% over the trailing month, significantly underperforming its industry peer group, which declined just 0.4%. Trading at a forward price-to-earnings multiple of 72.22X—considerably above the sector median of 20.37X—the stock commands a premium valuation. The Zacks Value Score stands at D, suggesting limited margin of safety at current levels.

Analyst consensus for 2025 projects a per-share loss of $0.57, though estimates anticipate a 188.5% improvement in profitability during 2026. The stock currently carries a Zacks Rank of #3 (Hold), reflecting mixed conviction about near-term catalysts versus longer-term opportunity.

The Bottom Line: Klarna’s aggressive push into in-store payments across Europe addresses a genuine market need and demonstrates product innovation. However, near-term profitability headwinds and elevated valuation multiples warrant caution for value-conscious investors. The competitive landscape will ultimately determine whether Klarna can defend its market position and achieve the margin expansion Wall Street projects.