For millions of young internet shoppers, the verb 'to Klarna', meaning to make a buy-now, pay-later purchase online, has entered the lexicon. 
The Swedish fintech firm is one of a select group of companies, including Hoover and Google, whose names have become synonymous with their products and services. 
It is, however, a double-edged sword for Sebastian Siemiatkowski, Klarna's 40-year-old founder, as his firm has also become a lightning rod for criticism directed at the industry. 




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'We want to be that digital assistant.

It goes back to the original bank manager, who cared about your finances and helped you. Somewhere along the line it went wrong. We want to bring that back. It might sound utopian but I am definitely going to push Klarna in that direction.' 
Some are not convinced.
'Klarna is a loss-maker but it is valued at more than Barclays - it doesn't add up,' says one senior finance industry figure. 'Some of their users have multiple buy-now, pay-later transactions on the go with different companies. People are piling up debt and it is a scandal waiting to happen.' 
Klarna has certainly mushroomed, with 16million customers and 20,000 merchants in the UK. 
Buy now, pay later, where customers settle their purchases in three instalments, is its best-known product, though it also offers a 'pay now' product and an option to pay in full in 30 days. 
There is no interest and no fees - Klarna makes its money by charging merchants.




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Not everyone is convinced by Siemiatkowski's arguments that Klarna is the responsible face of credit.
Buy now, pay later has provoked the ire of some campaigners including Labour MP Stella Creasy who labelled it 'the next Wonga waiting to happen', referring to the payday lender that went bust in 2018.
Klarna's products are not currently regulated by the City watchdogs, a situation Siemiatkowski admits is not ideal.

'I believe in competition but I am not an anarchist. In our industry we believe the fact it is entirely unregulated could lead to negative outcomes for consumers.' 
He claims Klarna's bad debt losses are 'around 30 per cent below credit card industry standards.
To me that is one proof point we are doing more responsible lending'. 
He adds: 'In the UK, losses have gone down in the last few years and on our total volume, problem debt is less than 1 per cent.' 
But surely Klarna encourages people to make more purchases, or buy more expensive items than they otherwise would?
'We usually calculate it has a lift of about 40 per cent average order value and about 20 per cent more conversions, that is 20 per cent more sales,' he says, which in other words is a 'yes'. 
Siemiatkowski is unlikely to win over the critics who claim his products are a social menace.

If he really can bring back the old-style bank manager, albeit in digital form, then Klarna might just shake up the big high street banks - though there will be plenty of pitfalls along the way.   





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