Buy now, pay later
Today, PaySpace Magazine would like to tell about Klarna Bank AB better known as “Klarna”. This institution provides multiple online financial services such as payment solutions for e-commerce, direct payments, post-purchase payments, etc. The parent company, Klarna Group plc, is listed on the New York Stock Exchange under the ticker KLAR.
What Is Klarna, and what services does it offer?
The bank launched in 2005 in Stockholm, Sweden. Making it easier for consumers to purchase goods online is the primary goal of this company. This aim is achieved by making a payment process straightforward, secure, and above all, seamless.
Today Klarna is one of Europe’s biggest financial institutions, which provides payment solutions for more than 120 million active consumers across more than 1.2 million merchants in 26 markets. The Klarna app alone reaches more than 55 million monthly users. As a licensed Klarna Bank, the company also offers a balance, a card, and memberships, so its services now go well beyond the checkout page.
Klarna provides different services, such as direct payments, pay after delivery options, installment plans, and post-purchase payments, and transforms a client’s shopping and payment experience into a seamless one-click purchase adventure, and lets clients pay when and how they would like.
A client has to sign in, thus he would be verified. Once a customer is verified, they can use the service’s options, such as “Pay later”, or “Fair Financing”.
Klarna also offers both merchants and clients its post-purchase payments option. With Klarna Pay Later, a merchant receives money right away, while a buyer is provided with a deferral for a short (from 14 to 30 days) term. If you decide to use the service and buy something, it is enough to enter your email, delivery address, and your mobile number.
You may ask how the system works. Well, Klarna analyses the input data and creates a user’s “online portrait”. It means that the system decides whether a client can be trusted to have a payment delay. Moreover, the company acts as an intermediary between merchants and customers, like PayPal, and it also accepts and saves your credit card details, so you will have no need to enter them over and over again. A lot of experts claim that process is somehow a lot like «Amazon One Click» for online retailers. This is the core of the buy now pay later Klarna model: the shopper gets the goods first, and the payment follows on agreed terms.
The features
For clients:
- Pay now. Pay by card directly at the checkout. No lengthy forms, no passwords, no worries.
- Pay later. Klarna lets you pay 14 or 30 days after delivery or in three equal installments – interest-free.
- Fair Financing. Spread the cost of a bigger purchase into equal monthly payments. This is the Klarna credit product, so interest may apply depending on the plan and the market.
For merchants:
- Pay later in 30 days. A free payment delay so customers can try before they buy.
- Pay later (in three parts). An interest-free installment plan for customers who want an alternative to credit.
- Fair Financing. Long-term installments to make larger purchases possible for your customers.
Klarna Card and new payment methods
Klarna payment options are no longer limited to the online checkout. The Klarna Card is a Visa card linked to the Klarna app. The card serves as a debit card by default. Thus, a transaction is completed instantly. Users have the possibility to divide payments or postpone the payment through the application. The card is widely accepted, both online and offline. Since its inception, the Klarna Card has acquired 6.5M users in 16 countries in total.
Moreover, Klarna Card enables its users to manage their money in Klarna balance, a digital wallet where they can store, withdraw, or deposit money. Klana also provides subscription services and has almost 2 million users.
In stores, customers can pay with Klarna through the app, through Apple Pay and Google Pay, or with the card. For merchants, Klarna works with payment service providers such as Stripe, so Klarna can appear next to card payments by default and no separate integration is needed.
Agentic shopping features
AI agents now search, compare, and in some cases buy on behalf of shoppers. Klarna has built several tools for this new way of shopping.
Agentic Product Protocol
In December of 2025, Klarna rolled out this new open standard that allows AI systems to tap into a live, structured feed of over 100 million products and 400 million prices across 12 markets. Merchants connect their catalogue once through Klarna’s hosted API, and the API accepts Google Merchant, Shopify, Facebook Catalog, and CSV or JSON feeds. The protocol is designed to complement the Agentic Commerce Protocol from Stripe and OpenAI, and it also works with other protocols, including Google’s AP2. David Sykes, Chief Commercial Officer at Klarna, said: “Before agents can buy, they need to know what exists.”
Stripe Shared Payment Tokens
In March of 2026, Klarna stated that the flexible payment feature would now be integrated into the checkout flows of AI agents via Stripe’s Shared Payment Tokens. Before this, AI shopping agents could only process payments made using cards on file, which did not offer the buy now pay later feature. The first step covers US merchants that already offer Klarna through Stripe, provided the AI shopping agent allows flexible payments at checkout. These merchants need no extra integration.
Klarna Shopping Search in ChatGPT
Launched on May 20, 2026, this app lets shoppers describe what they want in a chat and see results with up-to-date prices. It is built on Klarna’s Product Search MCP server and covers more than 100 million products from the Klarna merchant network across 13 markets.
AI assistant in the Klarna app
The assistant, powered by OpenAI, offers a chat-based shopping experience with product comparison, price tracking, and personalised recommendations. A shopper can compare offers and then pay with the preferred Klarna payment option.
Customer’s experience
Klarna offers its customers a network of more than 1.2 million merchants worldwide, where you can find different goods from various categories, such as fashion, sports, home, electronics, beauty, travel, and many others.
Moreover, customer service is available 24/7, so you can solve your issues even after business hours. The Klarna number for customer service in each country is listed on the Klarna website and in the app.
In addition, the company offers two types of checkout: Klarna Checkout, and Instore Checkout.
Klarna Checkout is a complete online checkout solution including identification and payments.
This type of checkout provides:
- Mobile-optimized online system
- Management of all transactions including card and APMs
- One-click repeat purchases
Instore Checkout brings a pay later option to clients shopping at your brick-and-mortar store.
This option provides:
- Consumer finance with Klarna’s Fair Financing.
- Easy application, minimal collection of personal details.
- Real-time decision.
Does Klarna Affect Your Credit Score?
It depends on the product and on the country. Short-term options such as Klarna Pay Later usually involve a soft check, which other lenders cannot see. Longer financing and the card may involve a harder check in some markets, so the terms should be read before the purchase is confirmed. Missed payments are the main risk. In the UK, a missed payment that ends up with a debt collection agency or as a default can appear on a credit report and stay there for up to six years. Paying on time is the best way to protect a score.
Klarna UK, Klarna Australia, and Klarna Italia
Buy now, pay later became regulated credit in the UK on July 15, 2026. Providers such as Klarna must be authorised by the Financial Conduct Authority. Lenders must run proportionate affordability checks before offering credit, and customers must see clear information before they agree to a plan. For Klarna UK users, Pay in 3 and Pay in 30 work as before, but checkout includes an extra confirmation step, and some applications may be declined.
The partnership between Klarna and Schuh, the UK footwear retailer, shows how these options reach shoppers. Schuh Klarna payments started online with pay after delivery and moved into more than 110 UK stores with Pay in 3. A customer who shops at Schuh can still choose Klarna at checkout.
Klarna Australia and Klarna Italia are among the 26 markets where the company operates. Each market has its own merchants, local customer service, and a set of Klarna payment options that can differ from the UK or the US.
Pros
To finalize our overview, let’s consider Klarna’s strong points:
- Log in. It’s easy. All you need to get started are these two small words: log in. A user-friendly and intuitive interface is super simple. No account needed, no inconvenient details need to be filled in.
- 24/7. Have you run into issues after business hours? Don’t worry. Just log in and Klarna’s expert chat agents will help you regardless of the hour. 24/7.
- Don’t miss any payments. Allow notifications in the app on the phone and you won’t miss any payments. You can also set up automatic payment withdrawal on the due date, along with many other useful features.
- All purchases. One place. When you buy with Klarna, all your purchases and payments will be gathered in the same place. This gives you a perfect overview of past and current Klarna transactions.
- Everyday spending. The Klarna Card and Klarna balance bring payments, cashback, and flexible options into the same app.
- AI-ready shopping. Klarna’s protocols and apps keep its payment options available as shopping moves into AI assistants.
