Europe's Version Of Paypal Eyeing Entry Into The U.S. Market

Klarna, a 10-year old e-commerce firm based in Sweden is eyeing an entry to the U.S. market, according to Reuters.

Klarna is one of Europe's most valuable tech start-ups and provides payment services for online storefronts and could offer U.S. consumers an alternative choice to Paypal Holdings Inc PYPL.

Klarna's service differs from Paypal as it offers a "one-click" impulse shopping feature and immediate payment to merchants. The service is also password-free and works like a credit card where users have the option of paying Klarna at a later time. Paypal does offer a credit service following its 2008 acquisition of Bill Me Later which was rebranded as PayPal Credit. However, Reuters noted that Paypal's credit transactions is "small" relative to its overall business.

Klarna's instant credit check and unique model is already operational in 18 markets across Europe, but the company is looking towards the US to generate a more sustainable growth profile. The company could enter the U.S. market late this year or in 2017.

"I don't think Klarna is completely unique, but has a unique combination of things. No one has really put them all together in the same way," Jacob Morgan, a senior analyst at Forrester told Reuters. "Klarna has the edge on the credit and behavior scoring - that's one thing that sets them apart, plus they pay the merchant immediately."

Shares of Paypal appear to be unaffected by the report as it was trading higher by 2.25 percent at $36.28 mid-Wednesday afternoon.