Discover the truth: Klarna doesn’t make money from hidden fees.

10 May 2021 - 3 min read





Myth: Klarna are evil, making money from hidden fees.

Truth: Well…Ouch! Let’s take a step back and let’s talk about what we are really doing here at Klarna. 

We are building a bank that people love. What we offer is a better alternative to traditional consumer credit that can reflect how people live today. With our Pay later solutions, we give you flexibility and control over your finances at no interest, even in case of missed payments. 

But how does Klarna make money then, you might wonder. Our Pay later model is fully funded by our retail partners. We charge merchants a transaction fee every time a customer uses a Klarna Pay later product, and we assume all of the risk on the transaction. Merchants support our ambition to make shopping as smoooth as possible and consumers appreciate it. A recent survey from found that 9.5 million UK consumers would actively avoid retailers that don’t offer buy now, pay later (BNPL) on their site. That’s in part why retailers pay to work with Klarna. To learn more about how Klarna makes money check out our dedicated


We are also committed to being 100% transparent in our communication. When you shop with one of our retail partners and you select Klarna Pay later at the checkout, we are clear about how much you have to pay, how frequently, and what you can expect from your shopping journey with us. We also make it clear that you are using a credit product with possible consequences for non-payment. 

However, we believe that transparency doesn’t stop here. We know that no two BNPL providers offer the same conditions and that it can be confusing to understand what you are signing up to. That’s why we called upon the BNPL industry to bring more transparency at the checkout.

Of course, we are not perfect. But for the small number of times when things do go wrong, all shoppers are protected by the

which means that you are not liable for a purchase you did not make or is faulty. 

We try to make it as simple as possible for you to communicate with us. You can, for instance, reach out to us via the Klarna app, which provides access to 24-hour support, 7 days a week. Alternatively, you can contact us via email, text message, or give us a call. 

If you aren’t happy with your experience, we have an in-house complaints procedure to make sure complaints are handled in a transparent, effective, and timely manner. Should you not be satisfied with the result, we’ve also established an internal

, which will give you the opportunity to request an impartial review of your case.

At Klarna we always have our customers’ best interest at heart. That’s why we would encourage any consumers with concerns to contact us. Our dedicated customer service team are always happy to investigate further and help resolve any issues.

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Copyright © 2005-2024 Klarna. Klarna Financial Services UK Ltd is authorised and regulated by the Financial Conduct Authority (“FCA”) for carrying out regulated consumer credit activities (firm reference number 987889), and for the provision of payment services under the Payment Services Regulations 2017 (firm reference number 987816). Klarna Financial Services UK Ltd offers both regulated and unregulated products. Klarna’s Pay in 3 instalments and Pay in 30 days agreements are not regulated by the FCA. Incorporated in England (company number 14290857), with its registered office at 10 York Road, London, SE1 7ND.