The Klarna Business Model & Work 2021 ?- How Does Klarna Make Money

How does klarna make money and firstly know what is klarna .

Klarna is the financial platform that facilities payment on the behalf of others companies. Klarna majors partners with the ( e-commerce space ) to offer their customers to pay product after giving the payment invoices .

Klarna make money via merchant fees, late payments fees ,interest on consumers loan , interchange fees , as well as interest on cash . Founded by two Swedish Business students in 2005 , The company have proven to great success .

Klarna has raised the total of $3.4 Billion and valued of $45.6 Billion , making it Europe’s Fine tech startup.

In this article we talk about how does klarna make money , how does klarna work and business model of klarna .

how does klarna make money

How Does Klarna Work?

Klarna is a payment service provider , which allows people to try out the products before they pay for them . Klarena majors partners up with retailers to handle the payment on there behalf .

consumers have a option to choose a form of payment options , ranging up to pay directly ( up to 30 days or later ) for different rate pf interest . Payment can be made online eg ; Paypal , Bank transfer or the klarna mobile app .

With bigger purchases klarna also allows you to finance up to 36 months and multiple payment installments .

Consequently , Klarna does not charge the consumers but the retail storev it work with .There are no interest fees and late payment charges for the consumers .

so why the online store give away shares of there revenue to have payments processed ? Because company having Klarna as your payment partners increases the 48 % volume to the increase rate of 68 % of the volume .

How Does Klarna Make Money?

Klarna makes money via merchant payments , interest or consumers loans , interchange fees , as well as interest on cash .

Let’s discuss all of them breifly .

Payment Fees

Klarna generates the bulk of income by charging the merchant the fixed transaction fee . The fees are dependent upon the payments methods as well as the country .

Talking the united as a example , Businesses have to pay the transaction fee 0.30$ . The variable fee ranges from 3.29% to 5.99% .

Klarna offers a variety of payments methods , ranging from direct payout to the loans and finance , to there instant shopping solution , which allows customers to check out within a few matters of clicks , Klarna charges it merchant :

  • A $30 monthly product fee
  • A fixed $0.30 transaction fee
  • Variables fee up to 3.29% to 3.79% for the offsite sales respectively

The instant shopping feature is the Klarna’s wider payments products which include online ( named checkout) as well as the offline ( called in store ) Solutions .

The supposedly seamless shopping experience allows merchant to increase there conversion rates , simply by removing friction and as well as the klarna as a trusted payment providers enabled .

For users don’t want to pay immediately , Klarna offers a variety of financing methods . These include 4 installments , financing and 30 days payments .

With 4 installments , the name indicates ,customers can settled their bill over the cources of 4 payments ( with in 2 weeks ) Klarna charged the fixed 0.30$ transaction fee and variables fees up to 5.99% .

Klarna payments allows the consumers to spread the payments by doing installments . Customers will pay up to the the payments period of 36 months . Klarna charges the , merchant the $0.30 fee and variable fees up to 3.79% .

On the top of that consumers have to pay interest on the loan , which can be last up to 0% to 29.99% APR. This gives klarna a stream source of income .

Lastly , Klarna charged a late payment fee should be invoice not be settled on time . This late payment fee are charged on the monthly basis and go as long as $35 .

Interchange Fees

As previously stated, Klarna announced its launch of a bank account for the German market in early 2021.

The product works like any other bank account, allowing people to store their funds, set saving goals, or conduct transfers

Interest On Cash

Klarna, just like any normal bank, uses the cash residing on those accounts to lend it out to other institutions, such as said banks.

They then collect interest from these institutions (also called Net Interest Margin). For 2019, according to Statista, the net interest margin for all U.S. banks was equal to 3.35 percent.


In this article we discussed how does klarna make money , How does klarna work and Business model of Klarna

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