Klarna has announced a multi-year forward flow agreement with Nelnet, a US-based financial services and investment firm, to support Klarna’s continued expansion of its Pay in 4 products in the US.

The agreement enables the Buy Now, Pay Later (BNPL) firm to sell newly originated, short-term, interest-free Pay in 4 receivables to Nelnet on a rolling basis.

Over the life of the programme, Klarna expects up to $26 billion in total payment volumes to be sold.

The company said that the transaction delivers scalable and efficient funding to power its growth, adding that the forward flow structure offers predictable, off-balance-sheet funding and underscores the company’s ability to structure and execute large-scale capital markets transactions.

Klarna will continue to originate and service all receivables under the programme.

“This is a landmark transaction for Klarna in the US,” said Niclas Neglén, chief financial officer at Klarna. “Our partnership with Nelnet allows us to scale a core product responsibly, while continuing to deliver smooth, interest-free payment experiences to millions of consumers.”

In October last year, Klarna made a similar deal with Elliott Advisors for a £30 billion expansion in the UK.

At the time, Klarna said it had grown “substantially” in the UK, with the number of retailers offering Klarna growing by 33 per cent to over 40,000.

In June, Klarna came under scrutiny from the Norwegian Consumer Council, which reported the firm to the country's Consumer Authority for allegedly failing to provide clear details on interest paid on BNPL products.

The independent, non-profit organisation that advocates for consumer rights and interests in Norway, claims that Klarna is violating regulations by not informing consumers about the real costs involved in credit purchases.

The organisation argues that the Financial Contracts Act, a major Norwegian law regulating financial contracts in the country, clearly states that BNPL providers must provide transparency on the financial consequences for users who buy on credit or instalments, including providing a clear example of a price with added interest.

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