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Klarna is an innovative payments company based in Stockholm, Sweden, and we don’t use the term “innovative” lightly. Started in 2005 by three students, Klarna is very much a payments firm for the startup age, providing services for both merchants and shoppers.
As of Dec 2019 they claim to have had 6 million customers across 4,000 websites in the UK and adding over 200,000 customers month which goes someway to explain their valuation of £4.3 billion in August 2019.
Online shoppers using its payment processor can spread payment up to £5,000 over 1 -36 months and only pay interest if they miss they don’t pay it back within the agreed timeframe (some rates can get as high as 18.9% if they delay payment).
Aside from its payment gateway, which allows you to process card payments on your website, the company offers shoppers a range of payment and financing options designed to help you sell more products. Topping the list of its payment innovations is its “buy now pay later” feature which allows customers to pay for your products after they’ve received them.
Here’s the exciting part, though: Klarna pays you for the product, as soon as your customer completes the purchase, so you get paid right away. Then Klarna takes full responsibility for collecting the payment and dealing with any refunds, which means you never miss out.
Sounds fantastic – right? The trouble we have heard so many negative reviews from online businesses who have tried it out. If anyone has used Klarna and is satisfied or even happy with the service please fill in a user review as at the moment the general consensus is to stay clear.
Klarna provides payment services for both merchants and shoppers, starting with its payment gateway which allows you to accept card payments on your website. However, it’s the payment options it offers your customers that set this company out from other payment firms. Klarna lets your customers pay for products after receiving them or pay in instalments while the company fronts you the money and takes all of the risk upon itself – so you always get paid as soon as your customers complete the purchase.
While Klarna’s payment options are truly innovative, the list of credit card issuers it supports is hardly extensive. You can accept payments from customers using cards from Visa, Mastercard and American Express, as well as PayPal. This will cover you for the vast majority of purchases but it’s worth knowing that support is more limited than most payment services options.
Klarna doesn’t clearly list its pricing on the official website, which is disappointing from a modern payment services company. However, with a little bit of digging around, you can find a list of transaction fees on the page for its WooCommerce integration. Rates depend on the country you’re accepting the payment from, based on the currency used by the customer.
Market | Transaction Fee |
|---|---|
United Kingdom | 2.49 % + 0,20 GBP |
Austria | 1.99 % + 0,35 EUR |
Finland | 2.75 % + 0,35 EUR |
Germany | 1.99 % + 0,35 EUR |
Global* | 2.79 % + 0,35 EUR |
Netherlands | 1.19 % + 0,25 EUR |
Norway | 2.79 % + 3.50 NOK |
Sweden | 2.79 % + 3.50 SEK |
USA | 2.99 % + (USD 0,30 applies on revolving account purchases) |
So this puts Klarna at the competitive end of the pricing spectrum even if it’s not the cheapest options available for either high or low-volume merchants. At this point, it’s important to remember that Klarna aims to actively help you sell more products and make more profit with the payment and finance options it offers your customers.
You have to decide how much value this adds to your business (if any).
As with most of the newer online payments specialists, Klarna doesn’t tie you into any contracts and this means you also don’t need to worry about any early termination fees. There’s simply nothing to cancel if you’re unhappy with the service. This is becoming the norm with modern payment services firms but so is publicly displaying fees on a pricing page that’s easy to find – one area where Klarna falls short.
The “buy now pay later” feature has proved very popular with online customers, particularly younger customers using retail sites. However, there have been some issues around transparency for those making payments which is a recurring them in the online complaints. As you can see from the user reviews below, there are many disgruntled current and former online businesses who are less than happy with Klarna.
Klarna offers fairly basic phone support for merchants in the UK with a phone line open between 8am and 5pm, Monday to Friday. That means no phone support whatsoever at the weekends and you can forget about bank holidays, which leaves you with the email option out of hours and a brief help section on the website.
Unfortunately, Klarna’s response to emails doesn’t appear to be particularly fast although most complaints we hear come from consumers who use the platform to buy products, not the businesses accepting payments through the company.
Make of that what you will.
Finding reviews from merchants using Klarna to process card payments isn’t the easiest of tasks. The company seems to have two accounts claimed on Trustpilot – Klarna.co.uk is listed on trustpilot.com and the lower scoring Klarna.com is listed on uk.trustpilot.com which is odd.
They’re both dominated by reviews from people using the platform to pay for products – or at least, try to. It’s fair to say reviews are mixed and there are common complaints about being refused the payment options and finance Klarna promises to provide.
There are also a number of complaints from shoppers about not getting items they’ve paid for or refunds when they’re not happy with the items they receive.
While these are complaints from shoppers rather than merchants, it’s important to remember these features are supposed to make it easier for people to buy products from you and – this is the whole selling point of Klarna. At the very least, if shoppers are being suddenly told they can’t buy now and pay later, this is going to affect your sales figures.
Klarna offers some genuinely innovative payment solutions and we hope to see more companies like itself bring new things to the industry. It has a wonderfully optimised payment gateway that makes purchasing a breeze for customers but it just lacks some basic things like a more extensive range of support for card issuers. However, the main problem is that Swedish company doesn’t seem to do the best job of meeting its promises for consumers or business owners.
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15 Comments
Stay Well Clear
I bought some T shirts from JD Sports and paid through Klarna I decided to pay off my outstanding balance in full and thought nothing of it. Klarna then started taking payments when I owed nothing. You speak to customer service they cant help noone rings back. Klarna then took more payments. I was then told they had made a mistake and would get my money back guess what another payment taken no refund had to put a stop on my card and 6 months later still no refund.
Did you find this review helpful? Yes (14) No (1)
Zero Score Too High
If i could give a zero rating I would.
Stay well away from this company, especially if you need to return items to the supplying retailer.
Shambolic is the best description I can come up with.
Did you find this review helpful? Yes (7) No (4)
A company that lacks integrity/poor customer service…
This company keeps trying to charge me for products that I no longer own. I returned the items to the store. So essentially, I am continuing to pay for items that are no longer in my possession. The store failed to do their part in the return process, and now I am made to suffer the consequences. Absolutely not!
Did you find this review helpful? Yes (5) No (1)
They SUCK!
Signed up for Klarna and made. $45 purchase. I paid this off early and decided to purchase something else within my initial $80 limit. Went through the purchase process only to be advised that I wasn’t approved for a ghost card. It’s been a week since I paid my tiny purchase off EARLY. Klarna is stupid. Probably for the best anyway…all these complaints confirm that I probably dodged a bullet anyway-
Did you find this review helpful? Yes (10) No
Absolute waste of time
We have tried to use Klarna to give our students better options to pay for our training courses, but the entire process has been dreadful.
Unclear instructions, unclear responses from support teams about issues at hand and after taking £1k worth of sales – they now tell us that we are too high risk and that they are automatically closing our Merchant Account. Absolute waste of time, stay well clear of Klarna!!!
Did you find this review helpful? Yes (8) No
Feedback as buyer but looking for real merchants feedback
As a buyer i was really impressed i felt safe and secure easy transaction used buy now pay later my experience led me to actually search there web directory for other vendors now as a merchant running a site myself i know this is exactly the reaction to a transaction you want so i came across this article i may be wrong but many reviews above are standard problems from misunderstanding for instance 3 weeks for refund process thats not excessive paypal is upto 2 weeks from merchant processing the refund so 7 days to accept return then to actually authorise the refund.
Chargebacks unfortunately part of being a merchant some people just dont see why need to pay but at the same time they not a common shoplifter as it was online…….. Is there any merchant out there that will offer a real review of impact
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Klarna Con Merchants
Awful experience having gone through the payment / checkout and did not willingly sign up to a credit agreement. Received the goods from the store together with a ‘Payment recieved’ notification so transaction complete…..or so i thought……Klarna then start sending me email for payment to be made……
How can ‘payment recieved’ mean i havent actually paid for it? this goes against what we all understand to be simple ‘double entry’ bookkeeping. I am annoyed that they did a credit search on me without my consent.
Did you find this review helpful? Yes (7) No (8)
They are completely Scam
I’ve run ecommerce shops for years and recently decided to implement Klarma, since them all Klarma operations resulted in a Charge Back, they are chargeing back items that have been delivered 30 days ago, the customers don’t return the items, and Klarma still say that they are giving the money back to the customers.
I have already disconnected them from my gateways, and I advise any merchant to stay away from these guys. They will cause you so much trouble and your business will lose a lot money working with these guys.
There is nothing innovative on it, they are pure scam!
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AVOID AVOID AVOID
DO NOT USE! They will not issue you a refund for returns. I’ve been waiting for 3 weeks to be refunded after my initial contact with the company on 8/13/19; I was informed by a customer service rep multiple times that they would “escalate this back to our specialist team”, once on 8/18/19 and again on 8/25/19. On my 8/25/19 contact, I told them they have 48 more hours to resolve this or I will escalate.
I’m currently sitting on hold waiting for their customer service hotline. This company is a joke.
I will be reporting this incident to the Better Business Bureau and locate news agencies to get the word out about how Klarna is nothing but a scam.
Did you find this review helpful? Yes (17) No (2)
Zero Merchant support
Terrible support, most of our Chargebacks are mistakes by Klarna, they do not put the merchant name on the customers statement, thus many think fraud.
You are not permitted to contact the customer directly and Klarna will also not do this if the claim is under fraud!
What a stupid system, all our other processing companies are fine
Did you find this review helpful? Yes (10) No
Cash transaction fees are charged in credit cards
Beware if you input a credit card ! I was horrified that a cash transaction fee was charged on my card . They do not tell you this! For something on pay in three the actual APR at 3.99% per payment (charged immediately then for a further two months) is extortionate. Avoid at all costs !
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Don't do it!
Stay away! They keep you in the dark. They want to charge you the late fee! They want an excuse to take the interest up to 19%
Did you find this review helpful? Yes (7) No (1)
Klarna is a scam
Klarna is a scam! They say they don’t run credit checks but they have several complaints with the business bureau that they have ran hard credit checks secretly! They also do not have good security anyone can make an account with your name.
They deny people with out any reason as to why. They send this whole speech about different factors, but even when you meet all the eligible requirements you still get denied. A waste of time
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No no no
Gateway is super buggy
Developers have no support from klarna on tech bugs etc
Did you find this review helpful? Yes (9) No
Do not use Klarna - Just stay away! Do not use Klarna they are the worst experience I had!
Just avoid Klarna!
Worst experience ever!
Gateway is not working.
Absolutely NO support with all the bugs!
Save all your development hours and stay away!
Did you find this review helpful? Yes (13) No