We gather useful software and tips to save your time and money for your business.
Are you sitting on the fence wondering where Klarna or Afterpay is the better financing platform to opt for?
In the present era, where the whole world is shifting to online trends, how can payment methods lack behind? That is why the BUY NOW PAY NOW (BNPN) trend is increasing. Two popular BNPN sources are Klarna and Afterpay. Both offer equally valuable servers. Therefore, choosing between Klarna vs Afterpay is never easy.
So, here we have come up with a detailed comparison of Afterpay vs Klarna for merchants, businessmen, and other people.
Launched in 2015, Afterpay is a pay-later financing app that allows users and buyers to buy on the spot and make payments for purchases later on. It is commonly used in Australia, the United States, and Canada.
It offers interest-free, no fees, and no credit check installments to eligible buyers for six weeks. However, if you pay the installment late, an extra fee, termed as a Late Fee, is charged. Whenever you make a purchase using Afterpay, you can break down your bulky price into four installments, pay the first installment on time, and pay the remaining in the span of 6 weeks.
Founded in 2005, Klarna is a Swedish payment processor particularly common in Europe. It works by partnering with third-party retailers that offer financing solutions.
Klarna offers the following three plans on its checkout list:
When comparing Klarna vs. Afterpay for business and merchants, we should first know the sign-up requirements and factors that make you eligible for it.
So, let’s find the sign-up requirements of Afterpay and Klarna one by one.
For initial sign-up, both ask for the same information, including your email address, date of birth, valid ID, bank account, and credit card details.
If you want to get approved by Afterpay:
On the other hand, you get approved by Klarna,
Online payment services may have a minimum and maximum spending limit that you must have to use their services.
For Afterpay, luckily, there is no minimum spending limit. You can go for a $5 purchase too. However, the maximum limit for the initial users is between $350 to $500, and it increases with time as you shop more. The maximum amount that Afterpay offers is $1500.
Klarna considers several factors like your order size, your loyalty to Klarna, repayment details, and many other things. It has a minimum spending limit that changes from region to region. Mostly, the minimum spending limit is $10. But for Australia, it is $35.
Both Klarna and Afterpay don’t charge any fee for signing up or interest for using the four installment service. Similarly, there are no “Prepayment” penalties.
However, if you pay late, then the late fee is charged.
Moreover, if you choose any other repayment term of Klarna, like the 6 to 36 months repayment plan, then you are charged interest by the retailers.
Klarna works with the following major eCommerce platforms and PSPs to make effortless integrations:
In comparison to it, Afterpay has the support of the following major platforms:
Klarna is available in
On the other hand, Afterpay is available in
Having efficient and fast customer service is one of the biggest turns on for buyers, and that is why when comparing Klarna vs. Afterpay for merchants and buyers in terms of customer support and service they offer, Klarna wins the battle.
You can contact the Klarna team via telephone, chat, and email. Moreover, guiding blogs and documents are also present.
However, in Afterpay, you can only contact the team via email or telephone.
Now that we are up with the detailed comparison between Afterpay and Klarna, let’s look at the ups and downs of the two financing platforms.
The pros of Klarna are:
However, it comes with a few cons like:
The pros and Afterpay are:
However, its pitfalls are:
Klarna and Afterpay are both equally good financing platforms. Where Klarna offers a lot of payment plans for large purchases, Afterpay is ideal for smaller purchases and makes it easy to impulse purchase.
However, when comparing Klarna vs. Afterpay, Klarna is definitely a better option due to better plans, more supported countries, and fewer late fees.
If you don’t like both Klarna and Afterpay and are looking for some alternatives, here are some options to go for:
No, Klarna doesn’t hurt or affect the credit score at all. However, information like payment holidays, unpaid balance, debt, etc., is visible to other lenders.
No, it doesn’t affect your credit rating as long as you are paying debts and installments on time.
There is no minimum credit score requirement for Klarna.
The most probable reason behind Klarna making you pay more upfront is that your order amount is higher than the maximum spending limit you have.
Yes, Klarna offers 6 to 36 months payment plans, but only for larger purchases.
Yes, you can pay off installments of Klarna earlier than the assigned date or time.
No, you cannot pay credit cards, utility bills, or phone bills via Klarna.