KLARNA STRIPE PLUGIN
Klarna Stripe Plugin
In October 2021, online payments processing giant Stripe entered a strategic partnership with Klarna to offer their popular “Buy now, pay later” service, allowing retailers to easily add an option for customers to pay in instalments. Here at Creative Marketing (NW) Ltd, we’re big fans of Stripe and use it as a primary payment method on all our customers website. Naturally as Klarna increases in popularity, we have had many requests from our clients to setup Klarna for them. When creating an account with Klarna, customers who use Stripe as an existing payment method on their website are also being referred by Klarna’s support team to setup Klarna via Stripe. As such we have developed a solution that allows you to now instantly offer Klarna payments to your customers if you’re already using Stripe as a payment method.
How the Klarna Stripe Payment Flow works
This lovely GIF created by Stripe shows you how the Klarna payment option works on a Stripe checkout.
How to setup Klarna Stripe
Unfortunately, your existing Stripe plugin that you most likely downloaded from the WooCommerce store does not work with Klarna. This is why we developed our own solution.
Purchase our plugin here to begin offering Stripe to your customers.
Step 1 – Enable Klarna as payment method on Stripe
So the very first thing you need to do before anything is enable Klarna as a payment method from your Stripe dashboard. The direct link to the page is here.
One you have “Request access”, the status will go to “Pending”. It takes less than 24 hours for this option to be approved and then you will have the option to “Turn on.” So check after a short while and turn Klarna on from your Stripe dashboard.
Step 2 – Install our Klarna Stripe Plugin
Unfortunately, your existing Stripe plugin that you most likely downloaded from the WooCommerce store does not work with Klarna. This is why we developed our own solution.
Purchase a license and download our plugin to begin offering Stripe to your customers.
Step 3: Activate & Enter Stripe API Keys
Once you have purchased the Klarna Stripe plugin, you will receive an email with the a link to download it as well as your license key. Deactivate and delete your existing Stripe plugin and upload and install the new one you purchased. Hit the settings button and enter your license code. Setup your Stripe API Keys and ensure Klarna is enabled in the plugin settings.
Congrats! You can now instantly offer Klarna via Stripe
Your customers will now be able to select “Klarna” when they land on the Stripe checkout page.
Once they enter their name they will be redirected to a lovely Klarna payment UX that looks like this;
Which Klarna payment products are available?
So it’s important to understand that Klarna has a range of payment options that are not all available by default. Based on the customer’s country and the transaction amount, Klarna offers various payment options. With each option, Klarna immediately pays you in full and handles collecting the amount from your customer. The options offered to the customer include:
- Instalments: Pay for the purchase in 3 or 4 interest-free instalments.
- Pay later: Pay for the purchase in 30 days.
Financing: Spread the cost of a purchase over multiple months. This option usually involves interest and a credit check.Pay now: Pay for the purchase immediately by direct debit, card, or bank transfer.
From these only the “Instalments” and “Pay Later” options are available. The “Pay now” option will never be available as Stripe prefers users to use their own immediate pay now option. For the Financing option you have to obtain a license from the FCA (Financial Conduct Authority).
Once you obtain your license, contact Stripe’s support after logging into your account and ask them to enable the “Financing” option for the Klarna payment method. They will then ask you to provide your FCA License number and then should simply enable it on your account.
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Klarna Payment Options
If you run a eCommerce store on WordPress and are using Stripe, you’re welcome to purchase a plugin license to start offering Klarna to your customers right away.
Questions & Answers
Offer Klarna via Stripe
How much does the Klarna Stripe Plugin cost?
We have three packages for the Klarna Stripe plugin;
£49.99 for 1 Site per year
- License for 1 site
- 1 year of plugin updates
- 1 year of ticketed support
£99.99 for 5 Sites per year
- License for 5 sites
- 1 year of plugin updates
- 1 year of ticketed support
£249.99 for 25 Sites per year
- License for 25 sites
- 1 year of plugin updates
- 1 year of ticketed support
How do disputes work in Klarna?
Klarna covers disputes driven by customer fraud or inability to repay instalments, provided you follow Klarna’s shipping policy. Merchants aren’t involved in customer disputes.
If a customer claims that you didn’t deliver the relevant goods as expected, Klarna may send you an email to request additional information to help resolve the claim. If you passed tracking information to Stripe, Klarna may be able to resolve the dispute without contacting you. If Klarna needs more information from you to resolve the claim, they will attempt to contact you twice. Dispute emails from Klarna will include the following information:
The Stripe payment reference (py_xxx)
The amount of the total payment
The date of the transaction
The customer’s email address
Emails will be sent to the support email address associated with your account; in case no such address exists, the email of the primary owner of the Stripe account will be used. You must submit the requested information to Klarna within 14 days. It’s important to reply to these emails as soon as you can with the relevant evidence as it increases the chance that the dispute may be ruled in your favor.
While the case is open between you and Klarna, the transaction will still show as “Paid” in your Dashboard and via the API. If Klarna rules in favor of the customer, they may issue a chargeback, with funds withdrawn from your Stripe account. Klarna dispute decisions are final—they have no appeal process.
Note that Klarna transactions cannot be disputed more than 180 days after the transaction.
What finance products are available?
Klarna’s Financing Product allows shoppers to buy now and pay over monthly instalments.
- Configurable: Offer the best, most transparent Financing payment option, with dynamic features including fixed 0% APR or term lengths from 6 months up to 36 months.
- Simple and transparent: Offer shoppers a straightforward closed-end loan with no hidden fees.
This feature is not available by default for:
- US merchants looking to offer financing to their US payers
- UK or EU merchants looking to offer financing to their UK payers
If you’re a US merchant looking to enable Klarna Financing to payers in the US, please contact us.
If you’re a UK/EU merchant looking to enable Klarna Financing for payers in the UK, you will need to obtain a credit broker status from the British Financial Conduct Authority (FCA). You can complete and submit the necessary form online through the FCA website or through a specialized consultancy service. If you are registered, contact us.
Why is being registered with the FCA a requirement?
Being registered with the FCA is a requirement because Klarna Financing is a regulated credit service. While Klarna facilitates a credit agreement with the customer, the merchant still offers the credit and makes it viable for the customer to do so through their website.
How complex is this process? How long does it take to complete it? Does it cost anything to the merchant to become a credit broker?
It takes a couple of hours to fill out and takes 8–12 weeks to come back. It costs £100–£500 to become a credit broker, depending on the size of the merchant. Merchants have to fill out a RegData report every year and pay a yearly fee, which is dependent on how much credit they’ve put through.
Klarna Financing—US Offering
- APRs: Dynamic 0-24.99% or fixed 0% APR
- Terms: 6- to 36-month plans designed for convenience and flexibility
- Order range: $199 to $10,000
Klarna Financing—UK offering
- APRs: 0%, 4.9%, 9.9%, 14.9% fixed APR options
- Terms: 6, 12, 24, 36 month plans designed for convenience and flexibility
- Order range: £250 to £5,000
Which categorises are prohibited by Klarna?
In addition to the categories of businesses restricted from using Stripe overall, the following categories are prohibited from using Klarna:
- Charities
- Political organisations, parties, or initiatives
Can I use the Klarna branding?
Klarna provides static visual assets and branding guidance you can use to increase awareness of your Klarna offering.
How do refunds work in Klarna?
You can refund Klarna charges up to 180 days after the payment completes. Klarna cancels any remaining payments on a refunded charge and returns the already-paid amount to the customer. Refunds usually take 5–7 business days to complete, but may take longer depending on the customer’s financial institution and the type of purchase.
Klarna supports full and partial refunds. You can also issue multiple partial refunds up to the amount of the original charge. Partial refunds update the Klarna order to reflect the new total amount.
- If the partial refund is greater than the remaining balance of the order, Klarna deducts the refund amount from the outstanding balance and returns the difference.
- If the partial refund is less than the remaining balance of the order, Klarna deducts the amount from the outstanding balance and spreads refunds evenly across the remaining payments.
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