Meet Klarna! CommBank’s newest venture into Buy Now Pay Later

Hey AfterPay and Zip! It’s time to move over, because award-winning Klarna is making waves in the Aussie Buy Now Pay Later scene. 

Originally founded in Sweden, the platform has been operating for 14 years all over the world - in places like the UK, USA and Europe. 

Since landing on Aussie shores last year in partnership with CommBank, Klarna has snapped up a 2021 Mozo Experts Choice Buy Now Pay Later Award for best Buy Now Pay Later service for Small Purchases. 

When Klarna first launched, 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.”

What is Klarna? 

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, and can be used for both in store or 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? 

While other BNPL services like AfterPayZip or Humm have partnerships with specific retailers, Klarna works a little differently. 

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 One-time card that acts as your payment option. 

What’s a ‘One-time card’? 

Well, when you find an item that you want to buy, Klarna will provide you with a One-time 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 and place a 25% of the value as an authorisation hold, which is released if you cancel or don't use the card within 24 hours. If you end up using the card, you buy the item and then you pay it off in 4 instalments. 

For online purchases, you can enter the details of your One-time card, just like you would a debit or credit card, along with your name as the name on the card. On the other hand, for in-store transactions, you'll need to select "Pay in store" - once your card is generated you can add your card to your Apple Pay or Google Pay. 

Remember, these cards are for one-time use, if you need to purchase something else from another store, you must create a new One-time card. They also expire after 24 hours if they aren't used.

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 instalment for transactions valued up to $59.99
  • $5 per instalment for transactions valued between $60 and $99.99 
  • $7 per instalment for transactions valued between $100 to $199.99
  • $15 per instalment for transactions valued over $200

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! 

Want to check out what else is happening in the world of Buy Now Pay Later? Jump over to our Buy Now Pay Later hub for all the latest!