We’re making late fees simpler for Australian shoppers.
Here at Klarna, our mission has always been to make shopping smoooth (yes, with an extra ‘o’). Our app provides the ultimate shopping service plus the ability to pay in 4, giving you the freedom to spend responsibly and take control of your finances. But, we’re always looking for ways to simplify the shopping experience, to remove friction where possible.
So what’s changing?
We’ve decided to restructure our approach to late fees. From 21st October 2021 we’re simplifying and reducing our late fees for all purchases. Any late repayments on purchases below $50 will no longer incur a late fee. For purchases $50 and above, the fee will be capped at $3 per instalment missed. Having a flat and consistent late fee means the maximum additional cost you could pay per order is $9.
Table 1 – Klarna late fee structure
Why does Klarna Australia charge late fees?
We believe in and encourage responsible spending, and we want our shoppers to only make purchases they can afford. We provide the tools to help shoppers stay on top of their payments; In the Klarna app you can view all your purchases in one place and receive push notifications when upcoming payments are due. Our approach to late fees is designed to help shoppers form positive shopping habits and stay on track with repayments by providing an additional reason to make responsible purchase decisions.
It’s important to note that we don’t charge interest on purchases made with Klarna or make major profits from late payments. Instead, we earn the majority of our money through strong partnerships with retailers all over the world. Our products give shoppers a better experience, so integrated merchants pay us a commission of their sales made with Klarna.
What else is changing?
While simplifying late fees we’ve decided to do the same for our snooze feature. If you don’t know, you can hit the ‘snooze’ button in the Klarna app and we’ll provide an additional 14 days to give you a little extra time to make the repayment. We’ll no longer charge a fee for snoozed repayments on purchases under $50 and have reduced the maximum snooze fee to be $2 which is applicable to purchases $50 and above. You can only snooze each order once – so use it wisely!
Where can I find out more?
The simplification of late fees and snooze fees means you’ll no longer be charged different amounts depending on the cost of your purchase. It’s all part of our mission to become Australia’s favourite way to shop and our continued efforts to create a more consistent and friction-free shopping experience (read more about that here).
Learn more about the late fee structure here.