Klarna surpasses 1 million merchant mark

Buy now pay later (BNPL) provider Klarna just announced that its global base of merchants now exceeds 1 million. The news comes as BNPL loans balloon, and a congressional agency puts a spotlight on the BNPL market.

Klarna, in a statement announcing its merchant milestone said it had grown the number of merchants offering its products by 47 percent in the past year, adding 285,000 merchants in 2025, with more than 115,000 joining in the final quarter alone.

Klarna said merchant growth is being driven by the company's expanding agreements with the world's leading payment services providers. It added that leisure, sport and hobby is now the company's fastest-growing merchant category, registering 91 percent year-over-year growth in February 2026.

"Home repairs, a new couch, salon appointments, gym memberships – these are facts of life for most people, but the way they pay for them hasn't kept up," said David Sykes, chief commercial officer. "Reaching 1 million merchants is a reflection of how deeply embedded Klarna is becoming in everyday money management, and the acceleration across verticals and markets shows no signs of slowing down."

With its merchant network now spanning over 1 million businesses across 26 markets, Klarna said it is well-positioned to convert network scale into sustainable revenue growth, and continues to expand into the high frequency, high-intent categories that define the next phase of its platform strategy.

Legislation would step in where CFPB stepped out

BNPL, a market dominated by nonbank financial technology firms, is fast becoming a popular POS option with consumers. The Consumer Financial Protection Bureau estimated that originations of pay-in-four agreements (the most common BNPL option) had increased from $2.2 billion in 2019 to $43.9 in 2023.

The Congressional Research Service, a non-partisan arm of the U.S. Congress, estimated further growth to $6 billion in 2025. A CRS report, released in February, estimated that BNPL merchant loan gross merchandise volume was roughly $40 billion in 2025.

While BNPL represents a sliver of total consumer debt, the CRS report detailed some concerning issues surrounding the product. "These include the degree to which BNPL products may encourage increased spending by consumers," CSR wrote. Also, reporting to credit bureaus. "As of the date of this report, only one major firm universally furnishes Pay in 4 data, even as certain credit scoring models are increasingly capable of using and scoring such data." The report also suggested that "a lack of central data collected on the BNPL [market] may present risks to policymakers attempting to assess the overall risks of the product if it continues to grow."

In 2024, the CFPB issued an interpretive ruling that applied certain credit card rules to pay-in-four BNPL products, namely the federal Truth-in-Lending Act. But that ruling was withdrawn last year as part of a Trump Administration push to diminish the consumer watchdog agency's scope of operations.

Since then, Representative Deborah Ross, D-N.C., and Senator Jack Reed, D-R.I., have introduced legislation that would specifically apply the TinL to pay-in-four BNPL products and would give the CFPB supervisory authority over nonbanks offering these products.

Representative Cleo Fields, D-La., has introduced legislation that would apply federal banking laws on the use, storage and protection of data on consumers who use these products. The Fields legislation also would require the CFPB and the Federal Trade Commission to study BNPL in credit scoring.

Broader legislation introduced by Representative Stephen Lynch, D-Mass., would create a federal task force to study the financial risks of BNPL and other emerging financial technologies.

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