Nordics have really poor laws around this. We have these payday loan companies that work under the same principle. Klarna just found a way to conveniently do the same. It is easier to capture buyers at the counter rather than before the counter. Effectively Klarna is a payday loan company in the Nordics and has nothing to do with easy checkout. In fact, they used to offer kickbacks to merchants, so every time someone chose Klarna invoice they would pay the merchant instead of charging for it, because they get so good profit from the individuals due to poor laws.

... and as always, trust works really well, despite the occasional fraud, until someone finds a way to exploit it at industrial scale. And then it fails spectacularly.