Buy now, pay later (BNPL) has swept the industry, drawing significant players like PayPal and CommBank. Find out how to know which service is suitable or if any are for you at all.
What is Klarna?
Klarna is a Swedish payment gateway that has grown to become one of Europe’s largest banks, serving over 60 million customers through 130,000 merchants in 14 countries. Klarna has exploded in popularity recently, with an increasing number of retailers adopting their “buy now, pay later” option.
How does Klarna work?
Companies (retailers often) can use Klarna to take payments from customers; Klarna can help them adjust the text type and color of on-site communications to promote “Buy now” or “Pay later.” When customers use Klarna to buy goods, they agree to a payment plan for that purchase or purchase.
Customers can use the mobile app to record returns, get in touch with customer support agents, track deliveries, receive price drop alerts across stored items, and access specials and discounts, among other things. Returning customers’ shipping or paying information is also automatically filled out by the platform.
What is Afterpay?
Companies are looking for ways to keep shoppers engaged and convince them to spend more money as online shopping becomes more prevalent. These internet firms do this by allowing customers to pay for their items over time.
Previously, this was accomplished by providing customers with a store credit card; however, retailers have recently begun to offer Afterpay. This Australian-based startup appeals to both shops and consumers since it allows them to pay for products later without applying for a credit card.
How does Afterpay work?
Afterpay is a digital payment network that allows internet shoppers to put off paying for goods. Instead, users can pay for things in weekly installments until they are paid in full. In addition, Afterpay does not require a credit check and does not charge interest.
What is the difference between Klarna and Afterpay?
|Sign Up Process||Klarna conducts credit checks in addition to requiring a valid credit or debit card. This is to establish new client eligibility; therefore, if you have very bad credit, you may be unable to use Klarna as a payment method.||You can sign up for Afterpay if you are over 18, have a legitimate credit or debit card, and reside in Australia.|
|Payment Schedule||Klarna also divides your payment into four parts, except that the installments are spread out over six weeks. You can also choose to pay off your loan early if you like.||Afterpay is noted for its four equal installments spread out over eight weeks payment plan.|
|Convenience||Through Klarna’s app, you may shop from any Australian retailer. Moreover, because you may use Klarna to purchase from anywhere, you can stick to just one pay-later service for all your purchasing needs.||Afterpay works with a select group of brands and merchants. While this is fantastic for discounts and offers, it does mean that you will have to use these services at those specific stores.|
|Features||Klarna not only allows you to make payments and check your account, but it also allows you to purchase within the app. Klarna also takes pleasure in offering 24-hour, seven-day-a-week help through their app.||Allows users to make payments and check their accounts from anywhere, which is ideal for staying ahead of payments.|
|Charges||After a missed payment, Klarna grants you a ‘slack period’ of two to seven business days. If you don’t pay within that time, you’ll be charged a $3 late fee for orders below $100 and $7 for goods above $100.||Afterpay charges a $10 late fee whenever your payments are past due, plus another $7 if the late payment is still not made within a week.|
Which is better? Klarna or Afterpay
After comparing the two, we can say for B2C retailers, the best payment gateway is Klarna. For customers, Klarna is currently a “trendy” payment gateway with many payment options that enable users to spend more and have better flexibility over their payments.