Klarna
About
Klarna is a buy-now-pay-later (BNPL) service, providing a range of payment options for users.
How it works
To use Klarna, your end users need to:
- Download the Klarna app and create an account
- Add a card or bank details
Payment options
Klarna offers four payment options, whose availability and specifics depend on the country:
User pays immediately at checkout using a method they save and manage in their Klarna account: card, bank wire, or direct debit.
User pays nothing at checkout – Klarna pays the full amount upfront and then allows 30 days for the user to repay, interest-free.
User pays first of 3 installments at checkout while Klarna pays the balance upfront and collects the remaining 2 installments at regular intervals, interest-free.
User pays nothing at checkout – Klarna pays the full amount upfront and agrees monthly repayment installments with the user over 6, 12, 24, or 36 months.
Benefits
The platform receives the full transaction amount in full, regardless of the option chosen by the user. Klarna manages all communication with the user and recovery of funds.
For the user, they benefit from payment options that suit them, which can be especially attractive for high-ticket purchases. From within the Klarna app, users have visibility of their purchases and outstanding payments, and can manage cards (CB, Visa, Mastercard, Maestro, AMEX), bank accounts, and direct debits.
PaymentMethod parameter
You can find out which payment option was chosen by the user in the API’s PaymentMethod parameter, which is returned in the pay-in once the transaction is successful (Status is SUCCEEDED). The values are:
- Pay Now (Card) - Pay now by card.
- Pay Now (Direct Bank Transfer) - Pay now by bank wire.
- Pay Now (Direct Debit) - Pay now by direct debit.
- Pay in 30 days (by card) - Pay within 30 days by card.
- Slice it (3 installments) – Pay in 3 installments.
- Slice it (Financing - X installments) - Pay via financing plan, where X is the number of monthly installments (6, 12, 24, or 36).
The options available and the specificities depend on the user’s region.
Country availability
Klarna provides payment options depending on the country of residence of the end user (defined in their Klarna account).
Sofort
Sofort was a bank wire payment method in Germany that was acquired by Klarna in 2014. Klarna deprecated the Sofort technical solution and the payment method was no longer available with Mangopay as of June 1, 2024.
For platforms looking to offer Sofort, we invite you to consider the following similar options:
- Klarna (whose pay-now flow is very similar to Sofort)
- Bank wire
- SEPA Direct Debit
Activation
To activate Klarna for your platform, contact Mangopay via the Dashboard.
Klarna Merchant Portal
During activation, your Mangopay admin receives an email inviting them to activate their account in the Klarna Merchant Portal. This involves accepting Klarna’s T&Cs and setting up two-factor authentication (2FA).
Caution - Activate within 7 days
Your Mangopay admin receives an email containing an activation link that must be used within 7 days.
In case of any issue, contact the Mangopay Support team via the Dashboard.
The Klarna Merchant Portal is required for:
- Integration materials, such as on-site messaging
- Disputes, because it is where you must take action
You can invite other users to the Klarna Merchant Portal.
Integration
On-site messaging
Klarna expects platforms to display messaging around their website to promote their payment options. For more information, see Klarna’s pre-purchase experience guide.
JavaScript Library
Klarna provides a JavaScript library, available from the Klarna Merchant Portal, which you need to install and customize on your website. Follow Klarna’s tutorial for step-by-step guidance.
Payment badge
Klarna’s logo badge for your checkout is available in Klarna’s purchase experience guide.
Payment descriptors
The payment descriptors for each locale are available below:
Sign in with Klarna
Klarna provides a single-sign-on (SSO) functionality that allows your users to log in to your platform using their Klarna account. For more information, visit Klarna’s documentation. This feature means users only need to sign in once at login, rather than at Checkout.
Klarna’s Mobile SDK for apps
When using Klarna in a mobile app, limitations relating to web views on both iOS and Android may result in a degraded experience for users. This commonly occurs during a redirection to a banking app or page as part of the payment or authentication process, but may also affect other cases, regardless of the region or payment option.
Klarna’s Mobile SDK is therefore required to overcome these limitations and handle the link between the web and native environments. You can use the SDK for a fully native app as well as one relying on web views, using a hybrid integration (see Klarna’s docs for more information).
Klarna provides example apps of both integration types in GitHub. Start integrating with their step-by-step guides:
The mobile SDK also contains everything needed for the rest of the payment experience, including on-site messaging and sign-in with Klarna.
Best practice - Integrate Klarna’s Mobile SDK for in-app experiences
If you are offering Klarna in your mobile app, it is highly recommended to integrate Klarna’s Mobile SDK to provide the best experience to your users.
Additional data
Klarna requires platforms to provide extra merchant data about the transaction (where possible) to increase acceptance rates. Failure to provide information may result in a higher rate of failed transactions with the following functional error:
- 202001 - AdditionalData format error
The value of the AdditionalData parameter must be formatted as a string of serialized objects. Refer to the Klarna Extra merchant data page for more information.
You should send the following objects in all cases:
marketplace_seller_infomarketplace_winner_infocustomer_account_infopayment_history_full, which is used for underwriting purposes to optimize acceptance rates. If not available,payment_history_simpleshould be sent instead.
If you offer goods delivery to pick-up points for self-collection, you should also send:
other_delivery_address
Other objects, such as the reservation details, may be necessary depending on your industry.
Disputes
Note - Contest disputes in Klarna Merchant Portal
Use the Klarna Merchant Portal to deal with all issues arising from payments.
For Klarna payments, Mangopay does not create a Dispute unless and until the case is already ruled against the platform by Klarna. This means that when the Dispute object is created, its ResultCode is LOST and it cannot be contested in the Mangopay Dashboard.
When a user raises an issue with Klarna, they are invited to resolve it directly with the platform during an initial period called the Dispute Resolution Time lasting 21 days in most cases (see Klarna’s documentation). You can respond to these open disputes in the Klarna Merchant Portal.
If a resolution is not found, the issue is escalated and Klarna’s team steps in to help resolve the situation.
Once escalated, the platform must give a first response within the deadlines listed below to avoid the dispute being automatically ruled against them.
When a Klarna dispute is ruled against the platform, a Dispute object (with the ResultCode value LOST) is created in the Mangopay API, the platform’s repudiation wallet is debited, and the funds are returned to Klarna (to return to the user).
Klarna dispute fees
See Klarna’s Dispute fees article for information on:
- When you may be held liable for a dispute fee
- When the Excessive fee applies rather than the Standard fee
Type 1 dispute fees apply to platforms using Mangopay.
Deadlines for first response
Platforms must respond to escalated disputes in the Klarna Merchant Portal before the deadlines below to avoid an automatic lost dispute and chargeback.