Meet Klarna! CommBank’s newest venture into Buy Now Pay Later
Hey AfterPay and Zip! It’s time to move over, because there’s a new kid in town, and it’s got a bit of an international rep.
Yesterday, Klarna - the latest Buy Now Pay Later service provider to hit Aussie shores - launched with one of the big four, CommBank.
It has been announced that the major bank has invested an additional US$200 million in the European fintech, on top of its initial US$100 million investment last year.
Originally founded in Sweden, the platform has been operating for 14 years all over the world - in places like the UK, USA and Europe.
CBA Chief Executive Officer, Matt Comyn, said that the partnership addresses the increasing demand for alternative payment options in Australia while also enhancing customer experience within their award-winning app.
“[Our partnership] allows us to build on our leading technology to deliver the very best payment services for our customers and merchants in Australia, on platforms which are safe, secure, and easy to use,” Comyn said.
“By partnering with Klarna, we are bringing together our market leading digital technology, merchant relationships and strong customer network with Klarna’s innovative payments technology and integrated shopping experience for the benefit of CBA customers and many more Australian consumers.”
Last year, Mozo’s experts gave the CommBank app not one, but two, 2019 Mozo Experts Choice Awards in the Excellent Banking App and Pocket Money Mobile App categories.
In Australia, Klarna is a new Buy Now Pay Later (BNPL) service provider that has teamed up with CommBank.
Like other BNPL products, Klarna provides a four interest-free installment payment model for online purchases, however you can not use it in store - it’s designed for online purchases.
Users can access Klarna through either the CommBank or Klarna app, which then connects you through to a whole bunch of online stores. Plus, for stores that aren’t already listed on the app, you can simply type in the name of the store or its website’s URL and Klarna will do the search and connect itself as a payment option for you.
How is it different to other Buy Now Pay Later Services?
The company boasts that you can use it at any online retailer, regardless of whether it’s listed on the app or not.
Plus, Klarna keeps customers in the loop with promotions and sales that stores are having, and it allows you to create a ‘wishlist’ of items you want to buy and opt to receive price drop alerts when they go on sale.
How does Klarna work?
At the moment, when you shop online through Klarna, you are given the option ‘pay with Klarna’ at the checkout, where you must create a ghost card that acts as your payment option.
What’s a ‘ghost card’?
Well, when you find an item that you want to buy, Klarna will provide you with a ghost card to buy that product, where you enter the amount you want to spend. Then, they approve the amount you requested to make your purchase, you buy the item and then you pay it off in 4 instalments.
Just bear in mind, there is a maximum limit of $1,000 for these ghost cards - so it may not be suited for higher valued items. Plus, these cards are for one-time use, if you need to purchase something else from another store, you must create a new ghost card.
Do I need to be a CommBank customer to use Klarna?
No you don't.
While CommBank has invested in Klarna, non-CommBank customers can also use the platform. It’s just a matter of jumping over to the app store, downloading the app and providing your card details from whichever bank you use!
Is Klarna free?
The sign up process for Klarna is free and there is no interest on your scheduled repayments, however if you miss any payment dates - you could face fees.
Customers are give a ‘courtesy period’ of two to seven days to make their repayment without penalty, after that they will be subject to the following costs:
- $3 per installment for orders valued to a total below $100
- $7 per installment for orders valued to a total equal to or above $100
How do I sign up for Klarna?
The way you sign up for Klarna differs a little depending on whether you are a CommBank customer or not. So to make things a little easier, here’s a step-by-step breakdown of how to do it.
For CommBank customers:
- Step 1: Log on to your CommBank app and open the Products and Offers Tab, where you’ll find ‘Shop now, pay later with Klarna’
- Step 2: Follow the prompts by hitting the ‘Tell me more’ button and then ‘Get started’
- Step 3: Share your personal details like your mobile number, email and home address (ensure they are all correct and up-to-date)
- Step 4: Select which card you want to pay with Klarna - you’ll have the option of any of your CommBank cards.
- Step 5: You will then be redirected to the Klarna app, which you can download from the app store. Here, you confirm your personal details again and create an account with Klarna.
- Step 6 To verify your details, you’ll be sent a verification email with a link, and then be sent a verification code to your mobile number which you need to enter in the app.
- Step 7: You must agree to share your info with CommBank, then you can login and start shopping!
For Non-CommBank customers:
- Step 1: Head to the app store and download the Klarna app.
- Step 2: You have to create a Klarna account, so enter your personal details like name, date of birth, and address.
- Step 3: After you provide your email, to verify it you’ll be sent a link that you’ll need to click. You’ll also be sent a verification code to your mobile number that you’ll need to enter in the app.
- Step 4: To verify your identity, you must provide your licence number or any form of formal identification, such as a passport.
- Step 5: Enter the details of your chosen card - this can be a debit or credit card - then start shopping with Klarna!
RELATED ARTICLE: Could banks adopting Buy Now Pay Later mean the end of credit cards?
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