Unit economics: Pay Later vs Fair Financing

Two products, two duration profiles

Pay Later · as reported

80% of FY2025 GMV

Pay in 30 and installment products such as Pay in 3 or Pay in 4 are fee- and interest-free to consumers in their standard form. Reported weighted-average life: 27 days.

Fair Financing · as reported

9% of FY2025 GMV

Longer-duration financing, with merchant fees and typically consumer interest. Reported weighted-average life: 109 days.

Pay in Full was the remaining 11%. The payment-option mix excludes KCO unbranded channels, so we do not multiply these percentages by total reported GMV to create false precision.

What the filing lets us calculate

Measure	Result	Status
Consolidated revenue / GMV	2.744%	our calc: $3,509m / $127,862m
Consolidated transaction margin dollars / GMV	0.968%	our calc: $1,238m / $127,862m
Credit-loss provision / GMV	0.63%	as reported, consolidated
Funding costs / GMV	0.52%	as reported, consolidated

Klarna says Fair Financing has higher upfront provisions than Pay Later. It does not disclose product-level take rate, processing cost, loss rate, funding cost, or transaction margin, so a numeric product-by-product unit economics bridge is omitted.

Accounting precision: the filing applies IFRS 9 expected credit losses (ECL), not U.S.-GAAP CECL. The economic concern about upfront loss recognition is directionally relevant, but no “CECL provision” is reported.

Source: Klarna Group plc 2025 Form 20-F, filed 26 February 2026, pages 132–139 and 151–160. Local source and calculation record: JSON. All product economics on these pages are public-filing data or explicitly labeled “our calc”; no Apptopia data is used.