Buy now, pay later firm Klarna, which filed for an initial public offering last week, has grabbed retailer Walmart (WMT) away from rival Affirm Holdings (AFRM) as a customer. Affirm stock dropped on the news.

Sweden-based Klarna has forged an exclusive deal with Walmart, according to a CNBC report.

Affirm Stock: Regulatory Filing

In a regulatory filing on Monday, Affirm said "On March 17, 2025, One Financial, a fintech company majority owned by Walmart, announced that it had selected Klarna Group, a competitor of Affirm Holdings, to offer installment loan financing to customers of OnePay at Walmart beginning later this year."

The Affirm filing added: "As of the date of filing this current report, Walmart continues to be an integrated merchant partner of the company. The company makes its pay-over-time products available to Walmart's customers through the company's integrated program with Walmart, as well as through the company's direct-to-consumer products, the Affirm App and Affirm Card.

During the six-month period ended Dec. 31, 2024, purchases made through the company's integrated program with Walmart represented approximately 5% of the company's gross merchandise volume and approximately 2% of the company's adjusted operating income."

On the stock market today, Affirm stock tumbled more than 11% to 44.13. Affirm stock has been pressured by worries over a U.S. recession. Shares were down 18% in 2025 as of Friday's market close.

Competition is heating up in the BNPL market. At a recent investor day, PayPal Holdings (PYPL) said it plans to be more aggressive acquiring BNPL customers.

PayPal Sets Big BNPL Push

Aside from San Francisco-based Affirm, Klarna also competes versus Block's (SQ) Afterpay, Sezzle and many other BNPL providers. Many top credit card issuers, such as Chase, now offer their own version of BNPL, creating more competition.

With BNPL options, consumers pay off purchases in monthly installments, usually with lower interest payments than credit card companies.

Jefferies analyst Trevor Williams in a report noted that according to Klarna's IPO filing, it garners the majority of revenue from merchant fees and about 25% from interest income.

The Klarna IPO could value the fintech company at around $15 billion to $20 billion, analysts have estimated.

Started in 2005, Klarna says it has over 150 million global active users and handles 2 million transactions per day. Klarna's other retail partners include H&M, Saks, Sephora, Macy's, Ikea, Expedia Group, Nike and Airbnb.

Further, Klarna filed to go public on the NYSE.

Affirm Partners: Amazon, Shopify

Klarna booked over $2.8 billion in revenue in 2024, up 24% from nearly $2.3 billion year-over-year. It posted a net profit of $21 million over that same period, an improvement from its $244 million net loss in 2023.

Meanwhile, Affirm's partners include Amazon.com (AMZN), Shopify (SHOP) and recently iPhone maker Apple (AAPL). Affirm has been expanding from BNPL to new areas, such as a debit card.