In-Store Tap: Klarna Plants Its Flag in 14 European Markets

Klarna Group plc KLAR has rolled out Tap to Pay across 14 European markets, bringing its flexible-payment ecosystem directly into brick-and-mortar retail at scale. The move taps into a major growth runway, with more than 80% of European shopping still taking place in physical stores. By leveraging NFC technology, Tap to Pay transforms the Klarna app into a seamless contactless wallet, enabling shoppers to set up payment plans and complete purchases with a simple tap.

This expansion builds on the rapid global traction of the debit-first Klarna Card, now used by over 4 million customers. The card’s acceptance footprint is vast, reaching more than 150 million merchant locations globally through Visa’s Flexible Credential. Klarna’s broader ecosystem also continues gaining momentum, supported by 114 million global active users and 3.4 million daily transactions, strong indicators that its product innovations are resonating with customers seeking simpler, smarter ways to pay.

The 14 countries are Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands, Norway, Poland, Portugal, Spain and Sweden. As buy now, pay later (BNPL) adoption accelerates, especially among digitally savvy shoppers, competition across the sector is intensifying. Klarna’s strategy focuses on elevating in-store and online checkout experiences to capture greater market share.

The company is also extending its reach in the United States, where momentum is particularly strong. Klarna posted record Black Friday performance, with gross merchandise volume up 45% year over year from Nov. 1 through Nov. 28. Growth was broad-based across categories, led by footwear, technology, beauty and home goods, reinforcing Klarna’s expanding influence in one of the world’s most competitive retail markets.

Competition is Fierce for Klarna

While London-based KLAR is expanding its U.S. footprint, it faces growing competition from peers like Affirm Holdings, Inc. AFRM and PayPal Holdings, Inc. PYPL.

Affirm’s short-term offerings, such as Pay in 2 and Pay in 30, encourage frequent re-engagement for customers. Itspartnership with Shopify is expected to roll out across Europe, with launches expected in France, Germany and the Netherlands. Meanwhile, PayPal already has a massive presence across 200 markets. Its strong performance in the U.S. market is supporting volume growth. PayPal expects to reach $40 billion BNPL TPV in 2025.

Klarna’s Price Performance, Valuation and Estimates

Shares of Klarna have declined 19.6% over the past month, underperforming the broader industry’s 0.4% fall.

From a valuation standpoint, Klarna trades at a forward price-to-earnings ratio of 72.22X, higher than the industry average of 20.37X. Klarna carries a Value Score of D.

The Zacks Consensus Estimate for Klarna’s 2025 bottom line is pegged at a loss of 57 cents per share, followed by 188.5% improvement next year.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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