Klarna – Buy Now Pay Later & Flexible Payment Solutions

Overview

Klarna is a financial technology company that offers payment services to online retailers. Its primary function is to simplify the checkout process for consumers by providing flexible payment options, commonly known as 'Buy Now, Pay Later' (BNPL) solutions. These options allow customers to make purchases immediately and pay for them over time, either in installments or after a deferred period. For merchants, Klarna assumes the credit risk and pays them upfront, ensuring they receive the full purchase amount regardless of the customer's payment schedule.

The platform is designed for e-commerce businesses of various sizes seeking to enhance their conversion rates and average order values by removing immediate payment barriers for shoppers. Klarna's core products include 'Pay in 4' (splitting payments into four interest-free installments), 'Pay in 30 days' (deferring payment for a month), and 'Financing' (longer-term installment plans, often with interest). These options are presented directly at the point of sale, integrated into the merchant's checkout flow via APIs and SDKs.

Klarna's developer experience is supported by extensive API references and SDKs for popular programming languages and platforms, including JavaScript, PHP, Python, Ruby, Java, Android, iOS, and .NET. This broad support facilitates integration into existing e-commerce platforms and custom-built applications. The company emphasizes a streamlined integration process, enabling merchants to quickly deploy flexible payment methods. By offering diverse payment choices, Klarna aims to reduce cart abandonment and increase customer loyalty for its merchant partners. The service also includes a consumer-facing app that allows users to manage their payments, discover deals, and shop from integrated retailers.

Key features

• Buy Now, Pay Later (BNPL) Options: Provides consumers with flexible payment schedules, including interest-free installments (Pay in 4) and deferred payment periods (Pay in 30 days) as detailed on their business product page.
• Long-term Financing: Offers extended payment plans for larger purchases, allowing customers to spread costs over several months or years.
• Merchant Payouts: Guarantees upfront payment to merchants, assuming credit and fraud risk from the consumer.
• One-Click Purchases: Simplifies repeat purchases for registered Klarna users, improving checkout speed and conversion.
• Klarna App: A consumer application for managing payments, tracking purchases, and discovering merchant offers.
• Global Reach: Supports transactions in multiple countries and currencies, enabling international e-commerce.
• Fraud Protection: Implements systems to detect and prevent fraudulent transactions, protecting both merchants and consumers.
• Developer SDKs: Provides client libraries for JavaScript, PHP, Python, Ruby, Java, Android, iOS, and .NET to streamline integration.
• PCI DSS Level 1 Compliance: Adheres to the highest standard of payment card industry data security, ensuring secure handling of sensitive data.
• GDPR Compliance: Complies with the General Data Protection Regulation for data privacy and consumer rights.

Pricing

Klarna's pricing model for merchants is based on transaction fees, which typically include a percentage of the transaction value plus a fixed fee. The specific rates are variable and depend on factors such as the chosen payment method (e.g., Pay in 4, financing), the merchant's industry, transaction volume, and geographical region. Klarna provides custom pricing quotes upon inquiry, as detailed on their business pricing page. There are no setup fees or monthly subscription charges; merchants only pay when a transaction is processed through Klarna.

Common integrations

Klarna offers integrations with various e-commerce platforms and payment gateways through its APIs and SDKs.

• E-commerce Platforms: Direct plugins and modules are available for popular platforms like Shopify, WooCommerce, Magento, and Salesforce Commerce Cloud. Merchants can find specific integration guides in the Klarna developer documentation.
• Payment Gateways: Integration with payment service providers often allows Klarna to be offered as an additional payment option within existing checkout flows.
• Custom Websites: Developers can integrate Klarna's payment widgets and APIs directly into custom-built e-commerce websites using provided API references and SDKs for languages such as JavaScript, Python, and Java.
• Order Management Systems: Some integrations support syncing order data and refund processes with merchant's internal order management systems.

Alternatives

• Affirm: Offers point-of-sale financing options for consumers, similar to Klarna's installment plans.
• Afterpay: Specializes in interest-free installment payments over four periods for online and in-store purchases.
• PayPal Pay Later: A suite of BNPL products integrated into the existing PayPal payment ecosystem, providing similar flexibility to consumers.

Getting started

To begin integrating Klarna's payment solutions, merchants typically set up a Klarna merchant account and then use the provided API credentials to configure their e-commerce platform or custom application. The following JavaScript example demonstrates a basic client-side integration for displaying Klarna's payment methods. This example assumes a server-side component handles the creation of a Klarna order and provides a client token.

// Example: Client-side integration using Klarna's Payments SDK
// This assumes you have a 'client_token' generated server-side
// and a container element with id 'klarna-payments-container'

// 1. Load Klarna Payments SDK (add this script to your HTML head)
// <script src="https://credit.klarnacdn.net/V1/api.js" data-client-id="YOUR_CLIENT_ID"></script>

// 2. Initialize Klarna Payments
window.klarnaAsyncCallback = function() {
  Klarna.Payments.init({
    client_token: 'YOUR_CLIENT_TOKEN_FROM_SERVER'
  });

  // 3. Load available payment methods into a container
  Klarna.Payments.load({
    container: '#klarna-payments-container',
    payment_method_category: 'pay_later' // Example: load 'Pay Later' options
  },
  function(res) {
    if (res.show_form) {
      console.log('Klarna payment form loaded successfully.');
      // Additional logic to handle form display
    } else if (res.error) {
      console.error('Error loading Klarna payment form:', res.error);
    }
  });

  // 4. Authorize the payment (triggered by user action, e.g., clicking 'Place Order')
  // This would typically be called when the user submits their order
  function authorizeKlarnaPayment() {
    Klarna.Payments.authorize({
      payment_method_category: 'pay_later'
    },
    function(res) {
      if (res.approved) {
        console.log('Payment authorized:', res.authorization_token);
        // Send res.authorization_token to your server to create the order
      } else if (res.show_form) {
        console.log('User needs to complete form data.');
      } else if (res.error) {
        console.error('Payment authorization failed:', res.error);
      }
    });
  }

  // Example: Attach authorize function to a button click
  // document.getElementById('place-order-button').addEventListener('click', authorizeKlarnaPayment);
};

For a complete integration, including server-side order creation and management, developers should consult the official Klarna developer documentation, which provides detailed guides for various e-commerce platforms and custom implementations.