I thought the only reason to use Klarna is for payments by invoice, where they would do also a background check on you. Yuck.

I don't know if it's popular in Germany but it's not like PayPal. It's more like a proxy for multiple payment methods as well as a billing and early-stage collections system. In Sweden we use Swish instead of PayPal, which is more like easy direct bank transfers using your mobile phone. Checking out with klarna allows paying with Swish. Normal bank transfers are also easy and free here but they can take a day or two to process, hence Swish (which is run by a consortium of the banks by the way.)

> It's more like a proxy for multiple payment methods.

That’s also what PayPal is. You can use PayPal to pay with many methods, including Klarna, GiroPay (which might be similar to Swish) etc.

I guess but the important difference is that you can't do transfers with Klarna but you can with PayPal and Klarna does invoices while PayPal doesn't. Also of note is that you can't have a positive balance with Klarna (unless maybe you overpaid for something.) I guess you're right though, they're both proxies but provide one or more of the sub-services themselves in-house, just not the same sub-service.