Buy now, pay later (BNPL) applications are gaining popularity among consumers, allowing them to make purchases and spread the payments over time without incurring interest charges. Afterpay vs Klarna stand out as two of the most favored BNPL apps, accepted by renowned brands.
This article aims to compare these two financing alternatives, aiding you in determining the more suitable choice based on the distinctive features and advantages offered by each app. Our preference for the superior buy now, pay later app between Klarna and Afterpay is based on its broader range of financing options, an extensive marketplace featuring more than twice the number of retailers, and the ability to generate virtual card numbers for use wherever Visa is accepted.
Afterpay Overview
Established in 2014 in Sydney, Australia, Afterpay boasts millions of global customers and hundreds of thousands of merchant partners utilizing the platform across Australia, the US, Canada, the UK, New Zealand, and the EU (where it operates as Clearpay). The current global team at Afterpay consists of over 1300 individuals and continues to expand.
Afterpay operates on a business model that is entirely cost-free for customers who make timely payments. This approach encourages responsible spending, as it eliminates interest, fees, and prolonged debt. By dividing payments into four installments, Afterpay empowers customers to access desired items and necessities, both for online and in-store purchases, while maintaining financial well-being and control.
Dedicated to delivering positive outcomes for customers, Afterpay primarily derives its income from merchants rather than customers. In the event of a missed payment, customers are temporarily barred from using Afterpay until payments are brought up-to-date. Late payment fees are applied, but they are fixed, capped, and do not accumulate over time. Customers are safeguarded from falling into a cycle of revolving debt and are spared from incurring interest. Afterpay remains committed to supporting its community of shoppers.
Buy Now, Pay Later Scheme
With Afterpay, there’s no set minimum you have to spend, but the stores they work with might have one. You can see the most you’re allowed to spend in the Afterpay app, and it’s figured out based on your personal info. Even if the app says you’re pre-approved for a certain amount, that doesn’t mean your purchase will definitely get approved when you’re checking out.
Payment in Installments: Afterpay provides the option for customers to divide their payments into four equal parts, with payments scheduled every two weeks. This service is accessible at the checkout of numerous online retailers.
Late Charges: Afterpay imposes late fees for payments that are not made on time, and the amount can vary based on the total purchase and the regulations of the country.
Online Shopping Hub: Afterpay introduces a marketplace feature called the “Shop Directory,” allowing users to explore and make purchases from participating online stores.
Integration with Mobile App: Afterpay offers a mobile app that enables users to oversee their payments, check upcoming payment schedules, and access exclusive offers from affiliated merchants.
Credit Verification: Typically, Afterpay conducts a soft credit check as part of the application process, and this does not impact the user’s credit score.
No Interest: Afterpay does not apply interest to its installment payments; however, late fees may be incurred for missed payments.
Afterpay Pricing
Four-payment plan: This choice enables customers to buy an item immediately and spread the cost across four installments over a six-week period. If the installments are paid on time, there are no interest charges or fees.
Monthly installment plan: This alternative allows customers to make a purchase and extend the payment period over a maximum of 12 months. A late fee of $10 is applicable if the payment is not made punctually.
Klarna Overview
Klarna is a Swedish fintech company specializing in e-commerce payment solutions. Established in 2005 by Sebastian Siemiatkowski, Niklas Adalberth, and Victor Jacobsson, the company is headquartered in Stockholm, Sweden, with a presence in 20 countries globally.
Since its inception, Klarna has evolved into one of the largest fintech companies globally, boasting the fastest-growing community of shoppers. With a network of over 450,000 merchants and facilitating over 2 million transactions daily, the company is dedicated to becoming the preferred method of shopping worldwide. To achieve this goal, Klarna is actively seeking the best talent to join its mission.
Presently, Klarna employs over 5,000 professionals across offices spanning three continents, representing more than 100 nationalities. The collective experience within the company is characterized by diversity and collaboration, delivering impact, dependability, and rewarding outcomes.
Klarna strongly emphasizes customer satisfaction, actively addressing and resolving their issues, whatever they may entail.
Buy Now, Pay Later Scheme
Klarna’s lowest amount you can spend is $10, and the highest depends on how much Klarna says you can spend. You can’t ask them to let you spend more overall, but you can ask to spend more on a single purchase. If their system says it’s okay, then you can do it.
Its BNPL service presents diverse payment alternatives for gradually paying purchase costs. Here is an overview:
Shopping Experience: Klarna ensures a seamless and user-friendly shopping encounter by incorporating a “Pay Later” option at the checkout, allowing customers to divide their payments into four equal installments.
Global Accessibility: Klarna extends its services across multiple countries and collaborates with a diverse array of online retailers, ensuring its availability to a global audience.
Klarna App: The dedicated Klarna app facilitates users in managing their purchases, monitoring deliveries, and conveniently making payments.
Payment Flexibility and Financing Choices: Alongside the “Pay Later” feature, Klarna extends financing plans, offering longer-term options, including interest-free periods and fixed-term financing.
Vibe Loyalty Program: Klarna introduces the “Vibe” loyalty program, presenting users with rewards, exclusive deals, and discounts from affiliated retailers.
Return Convenience: Klarna’s “Pay Later” feature streamlines the returns process, allowing customers to receive refunds for returned items.
Klarna Pricing
Pay in 4: Customers can buy an item and split the payment into four installments over six weeks, with no interest or fees if payments are made promptly.
Slice it: This option enables customers to make a purchase and extend the payment period, stretching up to 36 months. Interest rates vary based on the purchase amount and repayment duration.
Pay in 30 days: Customers can purchase items and settle the payment within 30 days. A late fee of $7 is applicable if the payment is not made on time.
Hot Stores to Use Afterpay and Klarna
Afterplay
- Thedogcastle
- Lululemon
- boohooMAN
- eShakti
- Zappos
- Adidas
- Wish.com
- Wayne Anthony
- Vince Camuto
- Urban Outfitters
- Unice
- Ulta Beauty
- UPPER
- UGG
- Tote & Carry`
Klarna
- Bed Bath & Beyond
- Calvin Klein
- Coach
- Cotton On
- Dior
- Farfetch
- Gucci
- Lululemon
- Macy’s
- Reebok
- Shein
- StockX
- Tommy Hilfiger
- Topshop
- U.S. Polo Assn.
Conclusion
Ultimately, the choice between Afterpay and Klarna comes down to your individual needs and preferences. If you’re looking for the most flexible payment options and the widest range of retailers, Afterpay may be the better choice. However, if you prioritize low fees and a seamless in-store shopping experience, Klarna could be the better fit. No matter which platform you choose, be sure to use it responsibly and avoid overspending. Remember, buy now, pay later services should be used as a budgeting tool, not an endless credit line.