Swedish payments startup Klarna to buy German online payment company BillPay

Swedish payments startup Klarna, today struck a deal to buy German online payment company BillPay from Britain's leading payday lender Wonga in order to become Germany's largest online payments company .

Wonga will sell Berlin-based BillPay - which has 12 million customers across Austria, Germany, the Netherlands and Switzerland to Klarna for about £60 million.

"Germany is one of the largest e-commerce markets in the world, and we are delighted to have strengthened our position here with this acquisition," Klarna said in a statement.

''This was always an odd acquisition for Wonga, since e-commerce is not the core of their business,'' said Sebastian Siemiatkowski, Klarna's chief executive.

''The question is why they bought it to start with. BillPay is more similar to Klarna's services, they have features that complement ours, and combined, we will have 27 million customers in a country of 80 million,'' he added.

Klarna is one of Europe's leading payment providers. It processed nearly €8 billion in payments last year and is active in 18 countries across the world.

Wonga, which has posted a total loss of nearly £120 million in the last two years due to several scandals and restructuring costs, is trying to rebuild its business by selling one of its most profitable overseas unit.