The Business Model of Klarna
In certain online stores, the company offers consumers the option of paying through invoice, quick transfer, or hire purchase. Consumers are not charged for using these payment methods. When purchasing on account or paying by instalments, the client is responsible for covering the outstanding balance in a timely manner; otherwise, reminder fees will be levied. Klarna also offers fixed deposit accounts, bank accounts, and the Klarna Card in addition to payment alternatives. The consumer instantly obtains a Klarna bank card, which is a Visa debit card, when they open a Klarna bank account. This card can be used to make payments online and in stores, as well as to withdraw cash. On the other hand, the Klarna Card does not require a Klarna bank account and can be linked to any existing bank account. On the other hand, the Klarna Card does not allow for cash withdrawals, although all other payment methods are accepted. This means that the consumer can pick between invoicing, quick transfer, and instalment payment not only online, but also in the shop. The Klarna app allows you to keep track of your payments and provides additional purchasing features. Klarna assumes the risk of fraud and default on behalf of merchants and pays outstanding amounts that remain unpaid after the payment deadline. Klarna charges a transaction fee for each successful transaction, in addition to a monthly base fee and a one-time set-up fee. The amounts vary by country and mode of payment.