5 ms·

Essentially it's like paying with a credit card, right?

by philipwhiuk 2y ago

basisword 2y ago
An interest free one so typically even better than a credit card (provided you make the payments).
- the_mitsuhiko 2y ago
  A credit card gives you ~30 days interest free credit before they charge you, Klarna not even two weeks.
- horsawlarway 2y ago
  It's never really better than a credit card. 4 payments over 8 weeks, so you owe money sooner than you would with a credit card (2 weeks), and credit cards are also interest free assuming you pay in full. The longer deferred payment option includes interest fees. Failing to pay immediately puts you up near credit card interest APY (19% to 33%) and includes additional fees (usually $7 fee immediately). Then the merchant fees are higher as well (3.5% to 6% fees for klarna, 1.5% to 3.5% for visa) and the fixed fee is high (30 cents for Klarna vs 5 to 10 cents for visa), so you'll see additional surcharges on the product. --- If this was designed for orders over a specific amount and targeted things like large catering orders... fine I guess. As is... micro-finance is a nasty form of usury.
atestu 2y ago
Very similar at the end of the day, but this is in 4 interest-free installments.
- mtlynch 2y ago
  It's four payments over six weeks. You generally don't pay interest on a purchase with a credit card if you pay it off within six weeks of the purchase. After the purchase, there's up to four weeks for the statement to close, and then another few weeks for you to pay your balance before you have to pay interest. But it looks like Klarna accepts credit cards, so I guess this lets you stretch out your cash even longer by combining the two.
- dagw 2y ago
  Does Klarna require that you pay in 4 separate instalments, or can you pay it all off at once?
rdrr984 2y ago
You get points with the credit card and pay no interest if you pay off the statement balance every month.
bitmasher9 2y ago
Its interest free, but the payments are less flexible and if you miss one then the fines are very high.
- torlok 2y ago
  So Klarna's business model is people missing payments on a regular meal? Does something similar work anywhere outside the US, or is this a US thing?
  - dagw 2y ago
    Klarna is a Swedish company, and is one of the biggest players in the online payment market in Sweden. Swedes can run up unsecured debt with the best of them. And yes, you've been able to pay your DoorDash equivalent in Sweden with Klarna for quite a while now, without it ever having made the news.
  - adrr 2y ago
    Like a credit a card, charge the merchant a fee. I think its around 4% which is why i am surprised door dash did it, usually on higher priced goods with more margin.
maxerickson 2y ago
Arranging the terms at time of sale for a small dollar item is somewhat different.

Essentially it's like paying with a credit card, right?

basisword 2y ago

An interest free one so typically even better than a credit card (provided you make the payments).

the_mitsuhiko 2y ago
A credit card gives you ~30 days interest free credit before they charge you, Klarna not even two weeks.
horsawlarway 2y ago
It's never really better than a credit card. 4 payments over 8 weeks, so you owe money sooner than you would with a credit card (2 weeks), and credit cards are also interest free assuming you pay in full. The longer deferred payment option includes interest fees. Failing to pay immediately puts you up near credit card interest APY (19% to 33%) and includes additional fees (usually $7 fee immediately). Then the merchant fees are higher as well (3.5% to 6% fees for klarna, 1.5% to 3.5% for visa) and the fixed fee is high (30 cents for Klarna vs 5 to 10 cents for visa), so you'll see additional surcharges on the product. --- If this was designed for orders over a specific amount and targeted things like large catering orders... fine I guess. As is... micro-finance is a nasty form of usury.

atestu 2y ago

Very similar at the end of the day, but this is in 4 interest-free installments.

mtlynch 2y ago
It's four payments over six weeks. You generally don't pay interest on a purchase with a credit card if you pay it off within six weeks of the purchase. After the purchase, there's up to four weeks for the statement to close, and then another few weeks for you to pay your balance before you have to pay interest. But it looks like Klarna accepts credit cards, so I guess this lets you stretch out your cash even longer by combining the two.
dagw 2y ago
Does Klarna require that you pay in 4 separate instalments, or can you pay it all off at once?

rdrr984 2y ago

You get points with the credit card and pay no interest if you pay off the statement balance every month.

bitmasher9 2y ago

Its interest free, but the payments are less flexible and if you miss one then the fines are very high.

torlok 2y ago
So Klarna's business model is people missing payments on a regular meal? Does something similar work anywhere outside the US, or is this a US thing?
- dagw 2y ago
  Klarna is a Swedish company, and is one of the biggest players in the online payment market in Sweden. Swedes can run up unsecured debt with the best of them. And yes, you've been able to pay your DoorDash equivalent in Sweden with Klarna for quite a while now, without it ever having made the news.
- adrr 2y ago
  Like a credit a card, charge the merchant a fee. I think its around 4% which is why i am surprised door dash did it, usually on higher priced goods with more margin.

maxerickson 2y ago

Arranging the terms at time of sale for a small dollar item is somewhat different.