Klarna, the 10-year-old Swedish e-commerce firm which is now one of Europe’s most highly valued tech start-ups, expects revenues to rise by about 40 percent this year as it moves into the U.S. market, where it has mounted a direct challenge to online payments giant Paypal.

“We’re picking up the pace in growth,” said Sebastian Siemiatkowski, the company’s 34-year-old chief executive and co-founder.

“This year, we’re going to add almost 10 percentage points to our growth rates, and in absolute terms we will probably double our growth,” he told Reuters.

Klarna, meaning ‘clear’, believes its password-free service which enables ‘one-click’ impulse shopping and immediate payments for merchants, will be key to attracting new customers and retailers in the fiercely competitive U.S. market where it launched in September.

Users don’t have to create an account or type in credit card details when checking out in an online store using Klarna, entering instead as little as an email address and zip code to settle the bill while having the option of paying Klarna later, as with a normal credit card.

Klarna runs a quick check using its algorithms and data it has built up over a decade and then, if approved, pays merchants instantly and bills customers for settlement later.

The company had a $2.25 billion valuation at the end of last year, after Swedish insurer Skandia bought a 1 percent stake for 200 million crowns ($23 million), and already handles 10 percent of all online transactions in Europe. In Sweden it now processes 40 percent of all online purchases.

Klarna investors include the founders, Sequoia Capital, Skype founder Niklas Zennstrom’s Atomico, General Atlantic, DST, Wellington Management CO and Wellcome Trust. Michael Moritz, a Sequoia Capital partner whose milestone investments include Google and PayPal, is also on its board of directors.

Disclosing 2015 figures for the first time, Siemiatkowski said Klarna generated 2.8 billion Swedish crowns ($331 million) in revenues last year, up from 2.2 billion crowns ($260 million) in 2014, thanks to strong sales in the Nordics and its German-speaking markets.

He said the company’s profitability was “very, very good”, but declined to quantify.

Though it is already present in 18 national markets across Europe, the big prize is now the United States, where online retail sales are seen growing 10 percent annually, reaching $480 billion by 2019, according to Forrester Research.

Siemiatkowski says Klarna’s U.S. business will start impacting growth more substantially late this year, or in 2017.

“It will take some time for it to catch up with the rest of the company,” he said, adding that new customers in German-speaking countries and the Nordics will drive the growth again this year.

The payments firm has no shortage of rivals.

PayPal moved into providing credit in 2008 when it acquired Bill Me Later, which was rebranded as PayPal Credit two years ago. PayPal Credit is small relative to PayPal’s overall business but increased its total payments volume by 27 percent in 2015 to $6 billion.

Mobile wallets like Apple Pay, Samsung Pay and Google Wallet and start-ups like Stripe and Square are also vying for a share of the market and analysts say it will be a tough but not impossible feat for Klarna, with 1,400 employees, to crack the U.S. market.

“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,” said Jacob Morgan, senior analyst at Forrester.

“Klarna has the edge on the credit and behavior scoring – that’s one thing that sets them apart, plus they pay the merchant immediately.”

Marc Niederkorn, a director at McKinsey & Co, agrees that paying merchants quickly will be key for any competitor.

“As soon as you are talking credit card, you’re going to have to wait,” he said. “Getting money in five seconds is a value proposition because it cuts working capital.”

Not everything has been easy, however. This month, Klarna lost its product chief to an internet bank after less than two years and has been accused in Swedish media of better serving the interests of merchants than shoppers.

Siemiatkowski said the company was well aware that having started out as a business aimed at helping merchants attract customers and handle payments it now needed to concentrate on helping customers pay.

“The history is that the company was very B2b and consumers were an afterthought,” he said.

“In the last two to three years we started realising that and started shifting. I had not been happy with the pace of that shift but am very confident with how fast we are moving now.”

($1 = 8.5351 Swedish crowns)

(Editing by Greg Mahlich)

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