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Lots of times when I’ve been buying things in e-shops I’ve been offered to pay using Klarna as a payment broker. But doing so has always been more confusing fo

Lots of times when I’ve been buying things in e-shops I’ve been offered to pay using Klarna as a payment broker. But doing so has always been more confusing for me compared to “regular” payments with a credit card anywhere else, and has on overall been a negative experience for me. I really don’t understand why anyone would prefer to use them at all. What am I missing? Can anyone help me understand?

queuep 5y ago
Not sure where you are located, but in Sweden, Klarna at the start (if I remember it correctly) only needed your 'personnummer'(social security number) to process payments. Now I think they manage to track your devices so I only have to enter my postal code, and then I just click purchase, and it's all done. They used to use really weird/dark patterns, to make you forget to pay and then pay huge fees to Klarna. Nowadays as I've configured Klarna, it just subtracts the amount from my bank account, hassle free, and I don't have to do a bunch of reserach wether or not the website is credible. Somewhat like Paypal, but smooother.
- jiofih 5y ago
  iDeal is smooth enough. Hoping this dystopian future does not come to the rest of the EU.
- rightbyte 5y ago
  Ye Klarna was really scammy early. Making their living on reminder fees.
- LinAGKar 5y ago
  And they don't notify you when it's available for payment, or when it's about to expire. So if you order something, and it for some reason takes a few weeks/months before they ship it and it becomes available for payment, you'll end up with a reminder fee with no warning.
  - ptx 5y ago
    Hm? I always get an e-mail when the invoice is ready and another e-mail when the payment has been received.
- gpvos 5y ago
  Sounds bad. I like my online payments to have a little friction.
- megous 5y ago
  Here we can just scan a QR code and confirm payment. No extraneous middle men involved. https://en.wikipedia.org/wiki/Short_Payment_Descriptor https://en.wikipedia.org/wiki/Short_Payment_Descriptor I don't see how credibility of website depends on what payment options they offer. That sounds like a separate issue.
djhworld 5y ago
I think the main selling point is being able to buy clothes and return the ones that don't fit without having to pay for the lot first, and get a refund later. The same can be applied to a credit card though so it's not a strong argument
ecmascript 5y ago
In Sweden you can use them to buy with an invoice which is a lot quicker than entering your credit card. That is probably the main selling point. Sellers get paid immediately and they take care of making sure the customer pays.
smilespray 5y ago
They usually offer deferred payment via invoice, removing the need to input CC details at the time of purchase. I've used that a couple of times, just because I wanted to move on to other tasks. (Not claiming it's a killer feature, but it's a feature.)
raesene9 5y ago
Klarna seems to be super popular with e-commerce sites, my guess is that there's some kind of financial incentive to the hosting site, when compared to other payment options. As to why it's popular with consumers looking at https://www.klarna.com/uk/smoooth/ https://www.klarna.com/uk/smoooth/ , seems like they're offering months of interest free credit and also the implication is that using Klarna doesn't affect credit score. It'd be interesting to know how their credit risk setup works.
- AtNightWeCode 5y ago
  Klarna is very easy to use. They take a large part of the risk. The seller typically sells the purchases to them. It may be different in different countries but the thing with the interest free credit is that once you don't pay on time it is converted into a revolving credit with high interest rate and something like a 60 months payment plan. Klarna have also historically made up own names for fees to circumvent regulations for regulated fees. They were among the first to remove days of grace and among the first to use a fixed number of days from purchase to due date.
whizzter 5y ago
They incentivize e-tailers by offering higher conversion rates(later) as well as taking the hit for fraudulent payments (often with regular CC billing an e-tailer can be liable for repayments) in exchange for a slightly higher percentage. Once someone comes to their checkout they hide or at least make the direct payment options well hidden so that by default people buy by taking credit with them. This credit often comes with shorter than industry standard payment terms so people end up missing payment and being handed over to their in-house collection agency that starts collecting overdue fees. It's considered digitalized loansharking by many for a good reason. Ironically it seems that for many smaller e-tailers using Klarna as the payment option seems to heighten the trust of customers so they're more likely to buy (my guess is that we've all been told or told people historically not to enter CC details on random sites and even with stuff like 3D-secure these days everyone is wary)
- Freak_NL 5y ago
  Klarna is really shady. It encourages a 'buy now, pay later' mentality, which may be convenient right there and then, but it creates an unhealthy style of shopping: https://www.theguardian.com/money/2018/nov/17/klarna-buy-now-pay-later-system-that-is-seducing-millennials https://www.theguardian.com/money/2018/nov/17/klarna-buy-now... It's Payday Loans 2.0. It's really disturbing to see Klarna as a payment option in many Dutch online shops. These always already have iDEAL (which the vast majority of customers use), a convenient way of doing an electronic bank transfer; and most shops support credit cards too.
purjolok 5y ago
With Klarna you just need to type some information most people know by heart (10 digit ID number, f.ex.) before the order is confirmed. This is convenient if one wants to buy something quickly from a mobile phone. The address will oftenalso be prefilled. A credit card number is much more cumbersome to type on a small device, and the address needs to be typed in separately. Some banks used to require people to log into their banks to temporarily unlock their card for internet shopping, or, nowadays, one also needs to authenticate the purchase with the bank. That adds extra friction. With Klarna one does not need to pay until 14 days after the goods are shipped. Credit cards are even better, but most people tend to just have a debit card. With Klarna they don't need to worry about spending too much money from the account and having some other payment bounce later on. I personally stopped using them after I fell for one of their dark patterns and bought something on credit, which incurred an extra fee. Legally I was entitled to cancel the credit purchase, pay the full amount and avoid the fee; but I was still annoyed.
def_true_false 5y ago
Same experience here. I assume it works better in Sweden, but I have no idea why someone with customers outside Sweden would want to use this. One e-shop I use regularly switched to Klarna and the whole checkout experience got much worse. Simple forms replaced by broken interactive ones, etc. It's still not better than the old UX, even after multiple iterations. I'm more reluctant to enter CC info than before, for what that's worth.
jan_Inkepa 5y ago
They were also doing short-term loans [ https://www.bbc.com/news/business-56343942 https://www.bbc.com/news/business-56343942 ], which were for a while being pushed quite heavily in some internet community things I'm a part of. Also, I figure they must be paying a lot of money to be the default payment provider on so many services. For me, asking for my bank login details is...ridiculous - it'll be interesting to see if it is still following the same tactics in a few years.
- def_true_false 5y ago
  > asking for my bank login details is...ridiculous Is there more information on this? Are they doing the same thing Plaid does in the US? That is, literally asking for user credentials to internet banking instead of using the banks' proper APIs?
  - gpvos 5y ago
    I don't know about current Klarna, but they took over Sofortüberweisung, which has been doing exactly that since 2004. Avoided them like the plague ever since.
  - jan_Inkepa 5y ago
    They are (or at least were, haven't checked in a while) asking for private bank account access details, yeah - https://www.reddit.com/r/germany/comments/bweqaa/is_it_safe_to_use_klarnacom_and_sofort_for_online/ https://www.reddit.com/r/germany/comments/bweqaa/is_it_safe_...
dstergiou 5y ago
You can get an invoice that you will pay later. Thus, you don't need to look for your credit card at the time of the purchase. You can choose to pay at a later date You can choose to split the payment into installments
alkonaut 5y ago
When I buy things (Sweden) it’s basically one-click checkout with just the e-ID signing to pay directly from my account, not via card. Definitely convenient.

queuep 5y ago

Not sure where you are located, but in Sweden, Klarna at the start (if I remember it correctly) only needed your 'personnummer'(social security number) to process payments. Now I think they manage to track your devices so I only have to enter my postal code, and then I just click purchase, and it's all done. They used to use really weird/dark patterns, to make you forget to pay and then pay huge fees to Klarna. Nowadays as I've configured Klarna, it just subtracts the amount from my bank account, hassle free, and I don't have to do a bunch of reserach wether or not the website is credible. Somewhat like Paypal, but smooother.

jiofih 5y ago
iDeal is smooth enough. Hoping this dystopian future does not come to the rest of the EU.
rightbyte 5y ago
Ye Klarna was really scammy early. Making their living on reminder fees.
LinAGKar 5y ago
And they don't notify you when it's available for payment, or when it's about to expire. So if you order something, and it for some reason takes a few weeks/months before they ship it and it becomes available for payment, you'll end up with a reminder fee with no warning.
- ptx 5y ago
  Hm? I always get an e-mail when the invoice is ready and another e-mail when the payment has been received.
gpvos 5y ago
Sounds bad. I like my online payments to have a little friction.
megous 5y ago
Here we can just scan a QR code and confirm payment. No extraneous middle men involved. https://en.wikipedia.org/wiki/Short_Payment_Descriptor https://en.wikipedia.org/wiki/Short_Payment_Descriptor I don't see how credibility of website depends on what payment options they offer. That sounds like a separate issue.

djhworld 5y ago

I think the main selling point is being able to buy clothes and return the ones that don't fit without having to pay for the lot first, and get a refund later. The same can be applied to a credit card though so it's not a strong argument

ecmascript 5y ago

In Sweden you can use them to buy with an invoice which is a lot quicker than entering your credit card. That is probably the main selling point. Sellers get paid immediately and they take care of making sure the customer pays.

smilespray 5y ago

They usually offer deferred payment via invoice, removing the need to input CC details at the time of purchase. I've used that a couple of times, just because I wanted to move on to other tasks. (Not claiming it's a killer feature, but it's a feature.)

raesene9 5y ago

Klarna seems to be super popular with e-commerce sites, my guess is that there's some kind of financial incentive to the hosting site, when compared to other payment options. As to why it's popular with consumers looking at https://www.klarna.com/uk/smoooth/ https://www.klarna.com/uk/smoooth/ , seems like they're offering months of interest free credit and also the implication is that using Klarna doesn't affect credit score. It'd be interesting to know how their credit risk setup works.

AtNightWeCode 5y ago
Klarna is very easy to use. They take a large part of the risk. The seller typically sells the purchases to them. It may be different in different countries but the thing with the interest free credit is that once you don't pay on time it is converted into a revolving credit with high interest rate and something like a 60 months payment plan. Klarna have also historically made up own names for fees to circumvent regulations for regulated fees. They were among the first to remove days of grace and among the first to use a fixed number of days from purchase to due date.

whizzter 5y ago

They incentivize e-tailers by offering higher conversion rates(later) as well as taking the hit for fraudulent payments (often with regular CC billing an e-tailer can be liable for repayments) in exchange for a slightly higher percentage. Once someone comes to their checkout they hide or at least make the direct payment options well hidden so that by default people buy by taking credit with them. This credit often comes with shorter than industry standard payment terms so people end up missing payment and being handed over to their in-house collection agency that starts collecting overdue fees. It's considered digitalized loansharking by many for a good reason. Ironically it seems that for many smaller e-tailers using Klarna as the payment option seems to heighten the trust of customers so they're more likely to buy (my guess is that we've all been told or told people historically not to enter CC details on random sites and even with stuff like 3D-secure these days everyone is wary)

Freak_NL 5y ago
Klarna is really shady. It encourages a 'buy now, pay later' mentality, which may be convenient right there and then, but it creates an unhealthy style of shopping: https://www.theguardian.com/money/2018/nov/17/klarna-buy-now-pay-later-system-that-is-seducing-millennials https://www.theguardian.com/money/2018/nov/17/klarna-buy-now... It's Payday Loans 2.0. It's really disturbing to see Klarna as a payment option in many Dutch online shops. These always already have iDEAL (which the vast majority of customers use), a convenient way of doing an electronic bank transfer; and most shops support credit cards too.

purjolok 5y ago

With Klarna you just need to type some information most people know by heart (10 digit ID number, f.ex.) before the order is confirmed. This is convenient if one wants to buy something quickly from a mobile phone. The address will oftenalso be prefilled. A credit card number is much more cumbersome to type on a small device, and the address needs to be typed in separately. Some banks used to require people to log into their banks to temporarily unlock their card for internet shopping, or, nowadays, one also needs to authenticate the purchase with the bank. That adds extra friction. With Klarna one does not need to pay until 14 days after the goods are shipped. Credit cards are even better, but most people tend to just have a debit card. With Klarna they don't need to worry about spending too much money from the account and having some other payment bounce later on. I personally stopped using them after I fell for one of their dark patterns and bought something on credit, which incurred an extra fee. Legally I was entitled to cancel the credit purchase, pay the full amount and avoid the fee; but I was still annoyed.

def_true_false 5y ago

Same experience here. I assume it works better in Sweden, but I have no idea why someone with customers outside Sweden would want to use this. One e-shop I use regularly switched to Klarna and the whole checkout experience got much worse. Simple forms replaced by broken interactive ones, etc. It's still not better than the old UX, even after multiple iterations. I'm more reluctant to enter CC info than before, for what that's worth.

jan_Inkepa 5y ago

They were also doing short-term loans [ https://www.bbc.com/news/business-56343942 https://www.bbc.com/news/business-56343942 ], which were for a while being pushed quite heavily in some internet community things I'm a part of. Also, I figure they must be paying a lot of money to be the default payment provider on so many services. For me, asking for my bank login details is...ridiculous - it'll be interesting to see if it is still following the same tactics in a few years.

def_true_false 5y ago
> asking for my bank login details is...ridiculous Is there more information on this? Are they doing the same thing Plaid does in the US? That is, literally asking for user credentials to internet banking instead of using the banks' proper APIs?
- gpvos 5y ago
  I don't know about current Klarna, but they took over Sofortüberweisung, which has been doing exactly that since 2004. Avoided them like the plague ever since.
- jan_Inkepa 5y ago
  They are (or at least were, haven't checked in a while) asking for private bank account access details, yeah - https://www.reddit.com/r/germany/comments/bweqaa/is_it_safe_to_use_klarnacom_and_sofort_for_online/ https://www.reddit.com/r/germany/comments/bweqaa/is_it_safe_...

dstergiou 5y ago

You can get an invoice that you will pay later. Thus, you don't need to look for your credit card at the time of the purchase. You can choose to pay at a later date You can choose to split the payment into installments

alkonaut 5y ago

When I buy things (Sweden) it’s basically one-click checkout with just the e-ID signing to pay directly from my account, not via card. Definitely convenient.