Klarna is a "buy now, pay later" service that lets customers split purchases into installments or pay later by selecting it as a payment option at checkout. It partners with thousands of retailers and offers different payment plans, such as paying in four interest-free installments, paying in full within 30 days, or longer-term financing options that may include interest. The user manages their payments through their Klarna account, and their spending limit can vary based on factors like payment history and the retailer.