Buy now pay later - Klarna etc?

[somewhereovertherain]

A quick question we run a very small retail website and B&M shop.

So far we've avoided adding the likes of Klarna as a payment option as not sure i agree with it.

Looking for opinions, due to the cost of living etc looking at adding it as an option.

AIBU to consider doing this.

or are they seen as okay and normal?

Don't want to be encouraging people to get into debt, but we also don't want to be losing out on sales if it is a prefered payment option.

Happy to be flammed for even considering it.

If I was needing to use Klarna for a B&M bargains style shop of bits of food and household tat then that would represent a pretty dire financial situation and taking out credit wouldn’t seem like a good solution to it.

B&M in the OP stands for brick and mortar. I have it in my online store, all of my friends that have online stores do as well. I found people were actively asking me for a way to spread the cost, that's when I implemented it.

Only if you missed payments that used to be there if you didn’t pay it didn’t matter now it matters

I wouldn't worry too much about it. I like Klarna a lot because it helps me to budget even if I could afford to purchase an item in one go iyswim? People will get themselves into debt whether you provide that function or not and your business really won't make a dent in that either way. Go ahead.

Yep we have apple and google pay.

I’ve seen lots of shops that only have 1 option so pay in 30 or pay in 3, and those that have both, so if you were worried about the chance of returns you could always just have the pay in 3 option?

I use pay in 3 quite a bit on larger spends, mainly because it makes me feel less guilty to spend it over 3 months than in one go…

I'm being pressured to add Clearpay (similar to Klarna) to my website.

However it is going to cost me 6% on each transaction which means I'll have to put all my prices up. That's on top of the increases in basic costs I'm carrying already and as I can't restrict the increases to those using the facility it means everyone paying more.

So for those who like Klarna?Clearpay etc - would you rather have lower prices instead?

This is why I use Klarna too, especially for clothes that I might not want to keep when I order online (as usually I love them online but hate them on me! 🫣).

I have used klarna once. Paid over 3 installments & absolutely on time. The then refused me any further transactions. To this day I have no idea why!?
I now use clearpay, far better app, payment options, payment reminders etc. You also pay over 4 instalments (so 8 weeks)
I only use them a few times when needed (only twice this year)
I understand since pay day loans people worry about the morality of them but there are many many more users like me that use them responsibly.
For reference I do claim benefits, I am also a single mother, I also work.
I can afford £50 to put away in savings each month, but taking £200 out in 1 month because the hoover broke or whatever isn't doable in 1 hit.
It's interest free.
I'm not trying to sound like an advert for these things I promise! But they are really useful to many people in situations like mine.

I use Klarna a lot - I am never sure if I need a 10 or a 12, so order both. I always pay on (or before) 30 days though, never split the payment. It’s just easier in terms of waiting for returns/refunds.

These things are fine as long as you can afford them and don't take out too many. It's for more where cashflow not affordability is the issue.

I've used Clearpay and Klarna several times instead of going into overdraft or using my credit card. It just spreads out a large item over two or three pay packets instead of one.

I use klarna a lot as I like the option of try before you buy and just paying for things I keep. I definitely opt for companies that have a klarna option. Rather than having to wait for refunds it's much simpler.

Not used klarna, but I have used the interest free PayPal instalments a lot recently, was a god send in August with an almost £400 school uniform bill. Our local uniform shop uses PayPal so I was able to split the bulk of the cost. It will be paid off this week.

Also agree it’s great for refunds, took a pair of boots back to M&S last week, my PayPal was refunded by the time I grabbed a brew in the cafe, unlike the matalan refund I’ve been waiting on for 10 days.

Klarna is okay for occasional purchases where you might need to spread the cost - boots, coats, etc - but that's all. The customer service is non-existent so if you have any problems, you're stuck, and the 'live chat' feature is abysmal. I recently asked if my spending limit could reviewed (having been static for ages) and they said no, not a chance, like it or lump it. A grim company.

I’ve used it a few times and the reason is quite silly. If I’m spending a lot sometimes I feel guilty (normally if it’s for just me) so spreading it into 3 smaller payments doesn’t seem as bad! I know essentially it’s the same thing and I can luckily afford to pay upfront but just takes away the spending guilt!

I love Klarna. It means I can order clothes etc and use the option to pay in 30 days and if I don't like and need to return I'm not out of pocket waiting for a refund. If I like it, I lay there and then don't wait the whole 30 days.

Pay*

There's a spending limit?

This article will answer a number of questions raised on this thread - including whether Klarna impacts on your credit score and why you might not be able to use it again even if you pay on time: theguardian.com/money/2020/oct/03/klarna-debt-buy-now-pay-later-fees-interest

Personally I would never use it as I think it encourages reckless spending and impulse purchases - two things I wish to avoid.

I think the spending limit only applies to the Financing section of Klarna's business (eg. spreading payments over a year with interest, rather than paying in three), but yes.

For financing, they assign you a credit limit - mine is £830 - and like the Guardian article says, the algorithm behind the figure is never revealed. For Financing, this stuff about 'checks being performed with every purchase' doesn't seem to work the same way - if your purchase pushes you above your limit, it will be declined and you can't ask for reviews or increases. Google "Klarna £830 limit" and there are lots of similar stories. It's a bizarre system.

tbh, I think there were similar concerns about offering credit card facilities when they first started coming into use in the early 70s.
I can remember DM being quite scandalised by people using credit cards for supermarket shopping.

I'm not in the UK but use a similar method of payment here. I always use it when available as it spreads the payments out, rather than having them all go on my credit card at once. Sometimes I will even search out a retailer who offers it and will use them in preference to one who doesn't. As others have mentioned it's good if you might be returning goods as you don't have the whole amount on your credit card waiting for a refund.

I’ve always found them helpful when I’ve had problems.

Do you accept payment by credit card? If so there's no logical reason to refuse to use Klarna and similar services, at least not on ethical grounds.

If anything, Klarna is less unethical because they don't charge interest if you pay on time, whereas usually credit cards charge interest after the first month.

I always use PayPal credit interest free and klarna and clear pay., For all my large payments especially on websites.

Mainly it gives me futher buyer protection and it helps me manage my funds. A majority of my purchases I have the funds already but by spacing the payments out over 2-3 months allows me to manage my funds easier and I can pay chuncks off when ever I like.

I will admit if a site does not take these payment types I will not shop there as I prefer the added protection.

I use klarna it’s really useful to not have to pay up front for clothes etc until I know I’m keeping them
also it’s better money wise for me to pay in payments rather than the full sum