Klarna's playbook is deceptively simple but highly effective. The fintech company accumulated $13B in customer deposits by offering competitive interest rates around 3% at its Swedish banking arm. Smart move—it created a stable, low-cost funding source. Then comes the revenue generation: those deposits get deployed as consumer credit for purchases. Merchants pay a 3% transaction fee to Klarna on each sale. This closed-loop model is brilliant because it monetizes both sides—savers get returns, merchants pay for the infrastructure, and consumers get instant credit. It's a direct challenge to the traditional credit card model, which relies on interchange fees and consumer interest. Klarna essentially reimagined consumer lending for the e-commerce era. The real test: can they scale this profitably while managing credit risk across millions of transactions?