Sweden, a global leader in innovation and digitalization, must ensure its consumer credit laws evolve to meet modern challenges. While Klarna has established a strong benchmark for responsible lending, much of the broader credit market has failed to keep up. As a result, over 436,996 Swedes currently have a debt with the Enforcement Authority. And the total debt is now 138 billion SEK.  Proportional and consumer-focused reforms are urgently needed to address this issue.

Klarna’s commitment to responsible lending

At Klarna, we’ve led the way in creating a more sustainable credit market:

• Transitioned from revolving credit to fixed-term options.

• Eliminated unnecessary fees.

• Extended interest-free repayment periods from 14 to 30 days.

• Introduced proactive reminders to help consumers stay on track.

The results speak for themselves: less than 0.5% of Klarna purchases go to debt collection, and only 0.0267% escalate to the Enforcement Authority. These achievements show that sustainable credit practices work.

While we welcome regulation we ask policy makers to have the following in mind: 

1. Level the playing field for BNPL

We welcome the inclusion of “Buy Now, Pay Later” (BNPL) under the revised Consumer Credit Directive (CCD2), as it strengthens transparency and consumer protection. However, exempting retailer-provided credit creates an unfair double standard.

For instance, a retailer’s interest-free credit would evade regulation, while an identical product from a bank like Klarna would face stricter rules. Consumers deserve consistency: 90% of Klarna users agree that all credit providers should follow the same rules.

2. Remove the 20% down payment requirement

The mandatory 20% down payment for credit purchases of goods is outdated and impractical. It risks pushing consumers toward higher-risk credit cards, which are exempt, and have a constant credit limit of often several 10 000 SEK.

In contrast, BNPL solutions like Klarna offer clear repayment plans and evaluate each transaction to prevent over-borrowing. This approach ensures 98% of Klarna purchases are paid on time, with credit losses below 0.4%. Modern regulations should encourage responsible credit, not penalize it.

3. Simplify information requirements for BNPL

The proposed pre-contractual information requirements for “Buy Now, Pay Later” (BNPL) are disproportionate and hinder the user experience without effectively strengthening consumer protection. Since a new credit agreement is entered into with each BNPL purchase, consumers must receive extensive information for every transaction—unlike credit cards, where information is provided only once. This creates an administrative burden and risks overwhelming consumers with excessive information.

At the same time, these rules distort competition by making BNPL more cumbersome than credit cards, despite credit cards often leading to higher debt accumulation. To ensure fair conditions, information requirements should be proportionate and not disadvantage interest-free payment solutions compared to riskier alternatives.

4. Correct misleading cost warnings

Mandating the phrase “Borrowing costs money” on interest- and fee-free credit is confusing and counterproductive. Consumers should be encouraged to choose low-risk credit options, not deterred by misleading warnings.

Limiting such warnings to products with actual costs would help consumers make better-informed decisions.

A call for balanced regulation

We fully support the goals of the Consumer Credit Directive to protect consumers and foster responsible lending. However, Swedish implementation must remain proportional and fair, avoiding unnecessary burdens on innovative solutions like BNPL.

By addressing these issues, the government can create a more equitable, sustainable credit market that works in the best interest of all consumers.