How often do you add items to your online shopping cart but change your mind at the last minute? Sticking to a budget is essential, but if you need to make a purchase that will drain or borrow money, it’s wise to use a ‘buy now, pay later’ service.
The debate over whether Klarna or PayPal is the better online payment platform has never been more heated. PayPal recently announced its entrance into the buy now and pay later industry. The two companies are looking less like rivals and more like competitors. Both maintain a high level of quality in their customer service, making this a hard choice.
Here’s the breakdown of these two financing options and how to use them.
What Is Klarna
Klarna is a ‘buy now, pay later service that has been around since 2005 and is used by nearly 100 million shoppers. They provide a flexible payment option to take care of most of your shopping needs, so you don’t need money before buying what’s right for you.
Klarna is a fast and convenient service for securing small loans for online and in-store purchases. The Klarna mobile app makes it simple to make secure purchases. It lets you purchase products with ease and helps you make affordable payments in stores such as Apple, Macy’s, Etsy, and Foot Locker. Especially when buying high-ticket items.
How Does Klarna Work
Klarna is a blended finance option designed for online purchases. Its mobile app allows customers to shop anywhere and pay with Klarna as they complete their purchase and at the checkout by using the app or selecting the merchant’s payment option.
There are no interest payments with any purchase unless you choose to finance your purchase. There are also multiple ways in which you can repay what you owe.
With their flexible repayment options, you can pay off your purchase in either 30 days, four instalments, or six to 36 months.
Klarna allows users to spend their money when they need to. They need a minimum purchase of $10, but there is no set limit. Instead, you will be given an estimated amount based on your current payment history and balances.
What Is PayPal
PayPal was established in 1998 and is a secure and reliable place to play online. It provides a secure payment system that lets you pay for items using your account, credit card or debit card. PayPal lets you select which of your connected accounts or cards to use as the default payment method, and that will be used unless you choose otherwise.
Many online retailers allow you to pay for your purchase using PayPal, even in three monthly instalments. You can use PayPal for more than just payments. You can also receive money through PayPal. The funds are paid into your PayPal account and are only depleted if you use them to pay for an item. You can top up the balance using one of your cards or bank account.
How Does PayPal Work
PayPal provides an easy way to make online transactions through several different services. They serve as a middleman between you and a bank or card company, so all transactions are handled through the platform. It is safe, secure & convenient.
With PayPal, you can use funds for various things like e-commerce, point of sale, or even bank transfers. Transactions can take 3-5 days or minutes to process. PayPal offers a diverse range of financial and monetary services for companies and consumers. For individuals, PayPal is an online payment platform that offers e-check, debit card, and credit card services.
For merchants, PayPal provides a range of competitively priced services with no long-term contracts. These features include PayPal Shipping, Invoicing, Working Capital and even PayPal Loans.
Klarna Vs PayPal – Payment Services in Comparison
Klarna: First Goods, Then Pay
Klarna is a Swedish company that offers a way for customers to only pay for goods after receiving them. Klarna may seem like an easy, safe way to purchase goods online.
Payment:
You can pay for your order in instalments after it is successfully delivered to you or just pay in full with a credit card.
Buyer Protection:
The company homepage states that they will be taking precautions to offer the safest payment method possible. All the shops were then tested with Klarna’s logo on your seriousness. However, It doesn’t come with a money-back guarantee.
Money Received:
Klarna is just for receiving the payments and not the money.
Distribution:
According to SimilarTech.com, more than 4,500 websites use Klarna as a payment system.
PayPal: Anywhere & Multi-Functional
PayPal is currently the most prevalent online payment provider for online shops. You can use it to make quick, safe payments in pretty much any eCommerce store you might visit today.
Payment Options:
There are many convenient payment methods at your disposal with PayPal. These include using your credit card, paying by instalments, bank transfers to PayPal, or using any balance within your account.
Buyer Protection:
Suppose the item was not shipped or significantly differed from the item description in the shop. In that case, you can contact their buyer protection team. Depending on the case, you will receive a refund or be eligible for a store credit.
Receive Money:
Sending and receiving money on a PayPal account is easy, cheap and secure. When using your credit card, you’ll be charged 1.9% of the total plus €0.35 per transaction.
Distribution:
This shows that PayPal is the most popular payment method globally, as 700.000 websites offer it to use.
Klarna Vs PayPal Pay in 4
Klarna pay in 4
Klarnas Pay In 4 lets shoppers split their orders over time and pay in total upfront. This allows them to have the convenience of shopping on any Klarna accepted sites with peace of mind knowing that they will not be charged interest at the end.
When you pay in four equal payments, Klarna takes the first payment as soon as you check out. The remaining three payments are collected every two weeks. You can spread the cost over six weeks with no interest or fees attached if you pay on time.
PayPal pay In 4
PayPal offers to pay your items in 4 instalments at major retailers, including some of the big names like Best Buy, Target, and Bed Bath & Beyond. With this plan, you’ll get four interest-free instalments for your items, and it’s the same plan as competitors like Afterpay and Klarna offer.
PayPal evaluates and approves your application based on various factors like your account history and other information supplied by the credit bureaus. Usually, when you apply for a financial service, they must do a credit check to see if you’re eligible. PayPal will potentially run one and explain why you weren’t approved in the email.
PayPal Pay in 4 isn’t available in these states, which include: Missouri, Nevada, New Mexico, North Dakota, Rhode Island, South Dakota, Wisconsin or any U.S. territories. Anyone who wishes to use this service must be of the legal age for their state.
Can You Use PayPal to Pay Klarna
It’s not currently possible to use your PayPal balance or accounts to pay for merchants through Klarna.
Can You Use Klarna to Pay a PayPal Invoice
Some PayPal users claim that you can add your one-time credit card provided by Klarna to your PayPal account. However, our research has not found any evidence to prove whether that process actually works. After trying this process, there have been reports of people being restricted from using their PayPal accounts.
Klarna Vs PayPal Credit
Reviewers felt that Klarna is the preferred option. For feature updates and roadmaps, reviewers preferred Klarna over PayPal credit. When comparing the ongoing product support, they found that Klarna’s quality was superior.
Klarna is different from PayPal because they allow stores to accept credit cards. So you can pay with your Klarna account at any store that accepts credit cards, unlike PayPal.
Where Can You Shop With Klarna and PayPal
One factor you’ll consider when choosing between your favorite payment services is the number of retailers that accept their service. Klarna has a large directory of new BNPL providers with reportedly more than 14,000 UK stores and services.
As one of the more popular payment services, PayPal claims to be accepted by millions of online stores worldwide. Both Klarna and PayPal are growing their lists, but it will take a while for Klarna to catch up with PayPal.
Is Klarna Better Than PayPal
Whether Klarna is better than PayPal depends on a lot of factors. One thing to consider is the retailer you are looking at and any other payment options available. If you’re looking for multiple, flexible payment options, Klarna is a good option.
PayPal is an excellent option for online shopping. If you’re looking to split your total purchase at a business that isn’t partnered with Klarna, you can expect PayPal to be able to help you. Klarna and PayPal, both count as BNPLs, meaning you can trust them with your payment details.
Both Klarna and PayPal operate as trustworthy businesses outside of the BNPL space. If you choose to use them, both companies can be trusted with your money and protect your payment details. The proper payment method can make a big difference in processing payments faster and saving money in the long run.
Make sure you pick Klarna or PayPal, the two most popular options, and start using them whenever possible. However, in the end, it is up to you which one works best for your business.
