Klarna – Services, pricing, comparisons and reviews

Last updated on 13 June 2023

Founded in 2005, Klarna has been redefining the payment and shopping service, transforming how businesses sell and customers buy products. This Swedish fintech company provides buy now, pay later services, which simplify the payment process for consumers and merchants alike.

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Headline numbers

Klarna’s scale and reach as of the end of 2022 is impressive. Here are a few key numbers that paint a picture of the company’s growth and influence:

  • Customers: Over 90 million active users worldwide
  • Retail Partners: More than 250,000 retailers in Europe and North America
  • Countries: Available in 17 countries across Europe and North America
  • App Downloads: The app has been downloaded over 12 million times
  • Transactions: More than 1 million transactions processed daily
  • Valuation: Valued at $45.6 billion in its latest funding round in 2022, making it the highest-valued private fintech in Europe and the second-highest globally.

These figures demonstrate Klarna’s expansive growth and the widespread adoption of its ‘buy now, pay later’ services. The company’s ambitious plans and continued innovation suggest these numbers are set to rise in the coming years.

Key information

Founded2005, Stockholm, Sweden
Website URLwww.klarna.com
Phone Number+44 (0) 808 189 3333
FSCS Protected?No
FCA Regulated?Yes
Key information

Pros and cons of Klarna


  • Simplified checkout process for consumers
  • Increased average order value for businesses
  • Allows businesses to reach a broader customer base
  • Integrated fraud and risk management


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  • Cost for merchants may be higher than traditional payment methods
  • Risk of encouraging impulse purchases, leading to possible consumer debt
  • Reliance on Klarna’s risk assessment, potentially missing sales if declined

Klarna products and services

1. Pay later in 3 interest-free instalments

This product allows customers to spread the cost of their purchase over three equal payments. The first payment is made at the point of sale, and the remaining instalments are due every 30 days. There are no interest fees or charges for customers who pay on time.

2. Pay later in 30 days

With this service, customers have up to 30 days after purchase to make payment. It gives customers the chance to try before they buy. Again, no interest or fees are charged for on-time payments.

3. Financing

Klarna also offers a financing solution for larger purchases. This pay-over-time option can be spread over 6 to 36 months. Interest rates and terms vary depending on the specific plan chosen by the customer.

Klarna reviews

Google Reviews4.5/5
Klarna reviews

Alternatives to Klarna

  1. PayPal Credit: Offers similar features but with the added advantage of being connected to a PayPal account.
  2. Affirm: Affirm also provides pay-over-time options with an emphasis on transparency and no hidden fees.
  3. AfterPay: Similar to Klarna, AfterPay enables customers to pay for purchases in four equal instalments, due every two weeks.

Additional considerations

While Klarna offers various advantages such as increased conversion rates and an elevated customer experience, there are additional considerations for businesses contemplating this service.

1. Merchant fees

Klarna charges a transaction fee and a percentage of the total order value to merchants, which could be higher than traditional payment processing fees. Businesses must assess these costs and their potential impact on profit margins.

2. Customer spending habits

The ease and flexibility of Klarna’s ‘buy now, pay later’ model could potentially encourage impulsive buying and lead to financial strain for customers who cannot manage their repayments. Merchants may want to consider the ethical implications of offering such a service.

3. Customer service dependency

As customers’ financial agreements are with Klarna and not the retailer, any payment disputes or issues will need to be handled by Klarna’s customer service. Therefore, the quality of Klarna’s customer service could directly impact the customers’ overall shopping experience.

4. Market competition

While Klarna is currently a significant player in the ‘buy now, pay later’ market, competition is growing. It’s important for businesses to keep an eye on market trends and consumer preferences, which may shift towards other emerging providers.

5. Regulatory landscape

The ‘buy now, pay later’ industry is under scrutiny from regulators, particularly over concerns that it might encourage irresponsible borrowing. Any changes to regulations could impact how Klarna operates and the benefits it offers to merchants and customers.

Klarna company history

Klarna was founded in 2005 in Stockholm, Sweden by Sebastian Siemiatkowski, Niklas Adalberth, and Victor Jacobsson. The company began with the simple idea to make it safer and easier for consumers to shop online.

In the initial years, Klarna primarily served the Nordic region, providing a way for customers to receive products before paying for them. This was an innovative solution at a time when consumers were hesitant about entering their credit card details online.

The company quickly gained traction and began expanding beyond Sweden. In 2010, they entered the German market, and by 2011, they were serving most of Europe.

Klarna continued to expand its product range, adding installment payments, a mobile app, and in-store payment solutions. The aim was always to simplify the shopping and checkout process for consumers.

In 2014, Klarna crossed the Atlantic to enter the U.S. market, quickly establishing a significant presence.

Over the years, Klarna has grown substantially, both organically and through strategic acquisitions, such as Sofort in Germany and BillPay in the UK.

By 2021, the business had become Europe’s highest-valued private fintech company, serving over 60 million consumers and 250,000 retail partners in 17 countries.

Today, Klarna is one of the world’s leading ‘buy now, pay later’ services, with its sight set on becoming a global payments and shopping service.

FAQ – Klarna

How does Klarna affect my business finances?

Klarna pays the full amount upfront for any purchases made by your customers using their services. You’re then protected from credit and fraud risks.

Can all businesses use Klarna?

Klarna partners with businesses across a wide range of industries. It is ideal for businesses selling higher-priced items that customers might appreciate splitting into several payments.

How do returns work with Klarna?

If a customer makes a return, Klarna handles the refund and adjusts any remaining payments accordingly.

Is there a risk of encouraging customers to overspend?

While Klarna does make it easier for customers to make large purchases, it’s also vital to encourage responsible spending. Klarna provides resources to help customers understand their finances.

How do customers apply for Klarna financing?

Your customers can apply for financing at the checkout stage. The application process is straightforward and offers an instant decision.

In conclusion, Klarna can be an excellent option for businesses seeking to expand their customer base and simplify the purchasing process. However, it’s important to understand all the costs involved and ensure it aligns with your business strategy.

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Reviewed by , Managing Director


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