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Klarna vs Clearpay: What is Better
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Note that the information about Klarna and Clearpay found in this article was taken from their respective websites on 4 August 2024. This information is subject to change.
What are Klarna and Clearpay?
Klarna is a Swedish online financial services and fintech company, established in 2005 and headquartered in Stockholm, Sweden. Being a buy now, pay later company, some of its features include customer payments, e-commerce payment processing systems and managing store claims. It has a significant reach across the EU, being very well established in Germany and the Netherlands.
Clearpay is another buy now pay later company, which allows consumers to pay in installments. It is much newer to the market than Klarna, having been founded in 2017, and based in Manchester, United Kingdom. Clearpay is mainly for the retail sector, and is a subsidiary of Afterpay.
Clearpay vs Klarna online payments
With Clearpay’s four installment payment system, buyers pay the first installment at the time of purchase, and the remaining three installments every two weeks. Usually order values have to be between £0 and £1500 for buyers to use Clearpay.
Clients who pay on time with Clearpay also have access to rewards, such as exclusive offers at a number of brands, as well as the option to buy gift cards and pay in installments for them.
For late payments, clients must pay a £6 late fee for every installment paid late, as well as another £6 if the installments are still not paid in seven days. A maximum late fee of £6 is applied for orders which are below £24, with Clearpay charging the lower of 25% of the order, or of £24, on orders above £24. However, consistently missed payments can have a significant impact on whether clients can continue to use Clearpay in the future.
There are a few more Klarna payments options than Clearpay. Like the latter, it also allows clients to pay in four installments over six weeks. These payments are made automatically and are interest-free.
Another option is paying in 30 days, also without interest. However, buyers who do not want to pay in installments also have the option of paying immediately with a credit or debit card. For larger purchases, Klarna has financing plans which can be spread out over six to 24 months, with annual percentage rate (APR) interest rates of 7.99% to 33.99%.
For late payments, Klarna has a £5 charge for orders above £20, but less if the order value is below that. The maximum late fee is 25% of the total order value, with Klarna usually not taking this fee until seven days later, with four reminders sent during this time.
Payments for both platforms are usually by creating a digital card in their respective apps and using it to pay in-store by scanning a QR code or tapping a phone to a payment terminal.
Klarna or Clearpay for business
Both Klarna and Clearpay are widely used for business. Klarna is used by a number of major brands in the UK such as Samsung, Asos, Deliveroo, Ray Ban, H&M, Adidas and more. It currently has 147 million global shoppers, as well as 450,000 retail partners and two million daily transactions.
Klarna allows businesses to provide payment facilities such as installments, pay in 30 days, and financing, which allows consumers to pay in 36 months. It also provides marketing solutions and data insights for businesses.
With 24 million active global consumers and 348,000 worldwide brands, Clearpay is also significantly used by businesses, with Pandora, Anthropologie, Asos and Urban Outfitters being some of its biggest clients.
Clearpay also offers installment payment services to businesses, allowing their customers to pay in four installments over six weeks, with other perks such as free sign up and several integration options.
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Klarna vs Clearpay integration
Klarna can be integrated into a much wider range of payment service providers (PSPs), technology partners and e-commerce platforms, such as Shopify, BigCommerce, Worldline, EKM, Adobe Commerce, Prestashop, Wix, Stripe and many more.
Klarna helps make the integration process even smoother with several platform-specific guides, merchant support and additional technical information available.
In comparison, Clearpay has only 12 platforms. These are Adyen, Stripe, Magento, Magento 2, WooCommerce, Commerce Cloud, Rocket Spark, PrestaShop, OpenCart, Wix, Ecwid and Shopify. Clearpay has technical support both for ongoing maintenance and the initial integration, and also offers bespoke solutions for businesses with their own developers.
How much does Klarna charge merchants
Coming to Klarna vs Clearpay merchant fees, Klarna is cheaper, charging a flat fee of 2.95% per purchase and a fixed fee of £0.20 on top per sale. This price is variable depending on market conditions, and also includes card processing fees.
Klarna also does not charge a monthly or joining fee. Another important factor which can impact Klarna fees is the size of the business.
How much does Clearpay charge merchants
Merchants using Clearpay pay a flat fee of 6% on every purchase made through the platform, as well as an additional fixed fee of £0.30. These rates are fixed, regardless of custom pricing, or subscription types.
Clearpay merchants are paid in full when the purchase is made, excluding the processing fee of the whole order. However, Clearpay fees are only charged at the time of sale, not on late payments, or on the other installments.
Difference between Klarna and Clearpay
One key difference between Klarna and Clearpay is that the latter offers significantly fewer payment options. Klarna also has a much wider range of integration options, as well as many more websites, at 111,267 websites, compared to Clearpay’s 6,834 websites.
Klarna also lets buyers try on things they purchase online before they pay for them, which is an added benefit. It also offers marketing services for businesses with annual sales of £3 million and more.
Clearpay is also aimed more towards clients who have a history of paying on time, charging relatively higher and more late fees than Klarna. It also has a few more sign-up requirements for buyers than Klarna, such as a verifiable email address.
Clearpay also offers Clearpay Shop, which is the platform’s own marketplace. It has a full range of merchant features, and does not charge merchants for advertising. Clearpay Shop can contribute significantly to referral traffic for websites, thus increasing sales.
What’s better: Klarna vs Clearpay
When it comes to Klarna vs Clearpay, both platforms have their advantages. Klarna offers several more payment and integration options, as well as greater customer reach in more countries. It can be a better option for already established merchants operating in several countries.
Clearpay has better customer service and is more user friendly. Due to its strict regulations on late payments, and stringent payment history checks, it also ensures that customers get into less debt they cannot afford. Clearpay Shop’s referral traffic can also be especially helpful for merchants starting out.
However, whether Klarna or Clearpay is better for a merchant will depend ultimately on the business’ size, goals, customers and areas of operation.
FAQs
Is Clearpay the same as Klarna?
No, Clearpay is not the same as Klarna. They are different buy now pay later companies offering payment solutions to both customers and retailers.
Does Klarna and Clearpay affect credit score?
Whether Klarna affects clients’ credit scores depends on the payment options they choose. Klarna’s soft credit checks, which are done when consumers choose its Buy Now Pay Later option, are not likely to impact clients’ credit scores. However, Klarna’s hard checks, which are done when clients choose its financing plan.
As of now, using Clearpay does not impact client credit scores. However, this may change as more credit agencies are now assessing buy now pay later histories for credit reports as well.
