1-3% of the transaction volume. That percentage is the 1.4 billion Klarna takes as revenue. The margins of that can be very high.

> That percentage is the 1.4 billion Klarna takes as revenue.

Implying that transaction volume is on the order of $200 billion? No.

For perspective, Amazon's 2018 revenue is $230 billion.

Are we sure that that's true? As a private company klarna can choose any metric they so desire as revenue...

What? Isn’t revenue kind of … revenue? What else can it be?

To my knowledge, there isn't any reason klarna can't describe their transaction volume as revenue. Then declare their margin 3%.

As a private tech company I would assume that they are using the broadest possible definition of revenue.

No. GAAP and IFRS have very strict definitions of Revenue. Transaction volume falls under the agency principle. Its not the Co's revenue.

That's not what a klarna transaction is.

Klarna pays the vendor immediately (with its credit line), and the user enters into a sort of debt contract with klarna.

Klarna's revenue is what it receives from the user.

It's a great business model when the interest rate is 0%.

Dunno about Sweden but lots of compensation stuff triggers financial reporting requirements for obvious reasons.

I think Klarna can charge slightly higher fees to merchants (it looks like they charge up to 6%) as sales increase with buy now pay later. Also they probably think they can make money off of servicing the debt (late fees, interest on balances).

Per https://www.klarna.com/international/regulatory-news/klarna-... their volume was $80B last year, 1.4B was their cut (1-3%) aka revenue, and the profit would depend on bunch of things such as their marketing/sales spend, wages, debt servicing, etc and most likely has been negative.

Edit: not "most likely" - apparently they lost to the tune of $700M

$80B is a number much higher than I thought, but Klarna correctly calls their $1.4B net operating income.

Visa’s margins are like 50–60%.