Mary Palnitkar

Step 1: Launch the WorkSpace · Open the WorkSpaces console at https://console.aws.amazon.com/workspaces/. · Choose Get Started Now. · On the Get Started with.

1. Focus on Overall Weight Loss Spot reduction is a technique that focuses on burning fat in a specific part of your body, such as the arms
2. Start Lifting Weights
3. Increase Your Fiber Intake
4. Add Protein to Your Diet
5. Do More Cardio
6. Cut Down on Refined Carbs
7. Set a Sleep Schedule
8. Stay Hydrated

As a modern business owner, you may be considering how a buy now, pay later (BNPL) service—such as Klarna—can elevate your operations. While the buy now, pay later market currently seems a boundless array of options, Klarna remains a prime choice among the crop. But is Klarna the prime choice for your particular business operations? The below guide details what Klarna is, how Klarna works, and even offers some alternative buy now, pay later options if you ultimately decide Klarna isn’t the best option for your operations.

A buy now, pay later payment solution, Klarna enables businesses to offer customers financing options for purchases, instead of paying for purchases in total upfront. Put simply, Klarna operates as a lender offering short- and long-term financing that is often interest-free.

Founded in 2005 in Sweden, Klarna currently serves over 205,000 merchants throughout 17 countries.[1]Investopedia. “How Klarna Lets You Pay Later With No Interest”. Accessed September 6, 2022. With Klarna, businesses can provide customers with the ability to pay for their purchases over time, in installments, without incurring interest.

After a purchase, Klarna pays the merchant in full on the consumer’s behalf. Then, Klarna bills the customer for the purchase. Consumers can make the required monthly payments or pay their Klarna balance in full at any time.

If you implement Klarna in your business, your customer’s payment processes through Klarna, after which the funds transfer to your business.

Yes. To split a payment, Klarna requires a minimum purchase of $10.00 in the United States.[2]Investopedia. “How Klarna Works”. Accessed September 6, 2022.

No, Klarna does not set a maximum purchase amount. However, a consumer’s purchase eligibility depends on their specific financial circumstances. Klarna uses a metric called “Purchase Power,” which automatically evaluates factors, including a consumer’s Klarna payment history and outstanding Klarna balance.[3]Klarna. “​​​​How much am I eligible to spend? | Klarna US”. Accessed September 6, 2022.

Some businesses have been hesitant to implement Klarna’s buy now, pay later service because of fraud concerns. While it’s true that there’s a risk of fraud when accepting payments, Klarna has several safeguards in place to protect businesses. For starters, all transactions are heavily encrypted. In addition, Klarna monitors activity for suspicious behavior and offers 24/7 customer support. As a result, businesses accepting Klarna payments can rest assured their customers’ sensitive financial information is secure.

Klarna does not perform a hard pull of your customer’s credit report, meaning it will not affect their score. However, Klarna still inquires about a consumer’s credit history, as well as their employment history and current income, during the application process. In general, consumers need a good or excellent credit score to qualify for Klarna financing.

Klarna reports purchase and payment activity to the major credit reporting bureaus.[4]The Fintech Times. “Spotlight: Klarna to Start Reporting BNPL Data to Credit Agencies | The Fintech Times”. Accessed September 6, 2022. If your customer finances their purchase, their credit score can be damaged if they make a late payment to Klarna.

Klarna makes money by charging merchants a fee on each financed transaction. Klarna also earns interest on the money shoppers pay over time. In addition, the company generates revenue through credit products and merchant services.

Klarna’s basic plans allow customers to choose to pay in four installments or within 30 days of the transaction date. Neither options are subject to interest as long as customers pay everything back within the set time period. If your customer misses a required payment, a $7 fee applies. Additionally, customers choosing to formally finance a purchase may be required to pay interest in the form of a variable APR up to 24.99%.

Klarna offers two interest-free plans:

The above payment plans are interest-free if payment is made in full according to the terms.

Though most commonly offered online, customers can also use Klarna when shopping in-store. Here’s how the two options work:

If you set up Klarna in your store, your customer just needs to provide their phone number and email address to access financing. Upon purchase completion, your customer receives an SMS with a link to pay.

If you set up Klarna at your online store, your customer only needs to provide their mobile number to access financing. Upon purchase completion, your customer is redirected to Klarna to finalize their payment.

Let’s talk about Klarna from the customer’s perspective. When customers purchase a product from a business offering Klarna, they have the option to pay with Klarna at checkout. When they choose this option, they’re asked to provide their email address and phone number.

Once your customer completes their purchase, Klarna sends them an instructional email or text message. Customers are generally allotted an agreed-upon number of days to pay for their purchase. They can make payments by logging in to their account via Klarna’s website or app.

If your customer is not able to pay within the set timeframe, Klarna works with them to set up a payment plan—though, interest may apply at this point.

Klarna is an excellent BNPL option, but it may not be right for your business. The service comes at a steep cost. For all payment plans, Klarna charges merchants a $0.30 transaction fee, as well as variable fees between 3.29% and 5.99% of the transaction total. Though, merchants may assume they’ll make up for these costs via their increased volume of sales.

As for whether Klarna is right for your business, there’s no one-size-fits-all answer. Ultimately, it depends on several factors, including your business model, average order value, and customer base. However, below are a few general guidelines to help you decide if Klarna is a good fit for your business.

Yes, for merchants and consumers alike, there are many alternative options to Klarna.

Utilizing Klarna for your business’s operations is an excellent method for boosting sales and building customer loyalty. However, these benefits do come at the cost of additional fees incurred on financed transactions. If these transaction fees deter you from implementing Klarna, or any other BNPL service, consider partnering with a merchant services provider to unlock lower credit card processing fees. With lower payment processing fees, you may just find a buy now, pay later service within your budget!