Klarna has revealed that its UK customer base surged to 18 million active users in the first quarter of 2025, representing a 40% increase compared with the same period last year. The Swedish fintech giant attributed the growth to expanding partnerships with British high street retailers and a broader shift in consumer payment preferences away from traditional credit cards. Chief executive Sebastian Siemiatkowski described the UK as Klarna's "most strategically important European market" during an investor briefing in London.

The company's UK transaction volume reached £4.2 billion in Q1, with fashion, electronics and home furnishings accounting for the largest share of spending. Klarna also reported that its default rates in the UK remained below 1.2%, a figure it credits to improved AI-driven affordability checks introduced late last year. "We have invested heavily in responsible lending technology, and the results speak for themselves," said Alex Marsh, Klarna's UK head.

However, consumer groups have reiterated calls for stronger regulatory oversight. Sue Anderson of StepChange Debt Charity warned that aggregate BNPL borrowing across the sector now exceeds £10 billion annually in the UK, and that many users are juggling multiple BNPL accounts simultaneously. The Financial Conduct Authority is expected to finalise its BNPL regulatory framework by the end of 2025, which will require providers to conduct full creditworthiness assessments for the first time.