<type name="Klarna\Kp\Model\PaymentMethodList">
    <arguments>
        <argument name="log" xsi:type="object">
            Klarna\Core\Logger\Logger
        </argument>
    </arguments>
</type>

This is a type configuration.

This configuration is for the base area. Base area configurations will apply to all the sub-applications.

This configuration tells the Object Manager that when a user wants a Klarna\Kp\Model\PaymentMethodList object that the following arguments should be used in the foo object's constructor.

• $log = new Klarna\Core\Logger\Logger (...)

<preference for="Klarna\Kp\Api\PaymentMethodListInterface"
            type="Klarna\Kp\Model\PaymentMethodList"></preference>

This is a preference configuration.

This configuration is for the base area. Base area configurations will apply to all the sub-applications.

This preference configuration tells the Object Manager when a user wants a Klarna\Kp\Api\PaymentMethodListInterface object that it should return a Klarna\Kp\Model\PaymentMethodList object.