Shopify Basics | Updated September 7, 2023  

Afterpay vs Klarna: Which One to Choose? A Complete Comparison

Buy now pay later (BNPL) apps have been popular in eCommerce and online shopping. Online shoppers can still pay for the items they need without waiting for their salary check.

These buy now, pay later transactions are predicted to increase worldwide in the future by over 450 billion USD between 2021 and 2026 – and the most used apps with this feature are Afterpay and Klarna. 

This Afterpay vs Klarna review will help you understand the difference between these options and decide which one to use. 

Let’s dive in.

What Does It Mean To Buy Now, And Pay Later?

Buy now, pay later is a form of short financing or a type of point-of-sale installment. It allows you to make purchases on small down payment and pay the rest of the amount in interest-free installments.

Depending on your service type, the down payment could be as high as 25%

This service is a great deal for online shoppers. You can buy almost anything you need or desire without waiting for your next paycheck.

Here is how the BNPL system works.

  • You get to the checkout page of the product you want to purchase. Here you opt for the buy now, pay later option.
  • Once approved, which takes a few seconds, you will have to pay a small down payment – a small percentage of the total cost.
  • A series of interest-free installments will be planned for the remaining amount.
  • You can pay installments via check, bank transfer, debit card, or credit card.

According to Statista, the key players in the BNPL are Afterpay and Klarna. As of June 2021, Klarna is reported to have approximately 90 million active users, whereas Afterpay had 16 million active users.

Afterpay vs Klarna – At a Glance




Due Amount at Purchase/ Down Payment



Repayment Terms

Pay 25% every two weeks

Pay 25% every two weeks


$600 in the beginning, then it is subjected to increase gradually

No predefined spending limit, it depends on your location




Late Fees

$10 as late fee plus $7 if the payment is not current after seven days

Max $9 per late payment

Return Policy

Easy returns

Easy and trackable refunds within 14 days.

Payment Method

Domestic debit and credit cards and bank checking

Accept all methods except prepaid cards.

Rewards Program

Name as Pulse, earn points for on-time payments

1 point with every $1 you spend

Popular Countries

North America

European Countries

What Is Afterpay?


Afterpay is a buy now, pay later (BNPL) app which lets you make purchases without worrying about the money. You can pay 25% of the total amount at the time of checkout. The rest will be broken down into four equal interest-free installments. 

Afterpay is mostly used and a popular option for people in North America. It is fully integrated with popular brands like Bed Bath & Beyond, Old Navy, Forever 21, Pandora, and UGG. 

You can use Afterpay in Australia, Canada, France, New Zealand, Spain, the United Kingdom, and the US at checkout.

Top Features

1. Repayment Terms

Afterpay has the simplest repayment terms. You have to pay 25% of the total amount at the time of checkout.

However, users with good standing and reputation can defer the downpayment for two weeks. The rest of the payment will be settled in four equal installments

The installments are due after every two weeks. In case of missing the due date, $10 will be charged as the late fee. Plus, if you can’t manage to pay in the next seven days, you will be charged $7.

2. Spending Limits

The spending limit of your account will be estimated by Afterpay based on several factors, including the frequency of account use. Initially, the limit comes off as $600, which will increase gradually. 

However, some merchants have limitations on how much you need to spend.

3. Online & In-Store

You can use Afterpay both in-store and online.

For online use, you can opt for the buy now, pay later option in the checkout stage and pay with Afterpay. However, when shopping in-store, you have to log in to the app and scan the bill with the Afterpay app.

For both modes, the repayment and downpayment terms would remain the same. The spending limits will remain the same but are subject to the merchant’s terms.

4. Refund Policy

If you have had a change of mind or, due to any reason, you want to get a refund, you can easily process it with Afterpay. Once you have returned an order, its complete payment will be refunded.

The payments you have already made will be refunded back to your card, and the upcoming payments will be canceled.

5. Rewards Program

Afterpay Pulse rewards program rewards customers on mindful spending and on-time payments. Every time you make on-time payments, you will earn 10 points. These points can last for a period of six months.

These points determine your tier, which comes with specific benefits. From 0-99 points, you will be in the Gold tier, 100-299 is Platinum, 300-499 is Diamond, and 500+ is Mint.

How To Signup?

Signing up with Afterpay is easy. You can download the mobile app and follow the prompts to create your account.

However, if you do not have an account, you can still proceed with the buy now pay later option and select Afterpay to make the purchase. Once your order is approved, your Afterpay account is created.

What Is Klarna?


Klarna is a well-known and most used buy now, pay later Swedish fintech company. Like Afterpay, Klarna lets you purchase products online without worrying about the money. 

You need to pay the downpayment at the time of making the purchase. The downpayment is 25% of the total cost

After this, the remaining amount will be divided into four equal interest-free installments that you have to pay after every two weeks.

Klarna is the most common in European countries, especially Sweden and Germany. That’s why it holds the highest number of customers/users around the globe. 

You can use Klarna at checkout in Sweden, Norway, Finland, Denmark, Germany, Austria, the Netherlands, Great Britain, and the USA.

Top Features

1. Repayment Terms

Klarna divides the total product cost into four equal installments. You have to pay the installments after every two weeks.

In case of delay, you will be charged a late fee of $9 for one transaction. However, you can adjust the repayment deadlines. 

For example, if you want to pay at a later date, you can consider the option to pay after 30 days or over six months. But these payments will be subject to interest.

2. Spending Limits

Klarna requires its customers to pay at least $10 per order. However, there is no predefined spending limit, depending on your location. 

Moreover, the spending limit will be decided based on several factors, including your purchase, order size, standing and reputation, and repayment history.

If you make timely repayments, it will improve your standing status with Klarna.

3. Online & In-Store

To pay online with Klarna, you can select the buy now, pay later option and opt for Klarna. You will be asked to insert your payment details.

Once your order is approved, your Klarna account is created, and you can use it for online shopping.

To pay in-store with Klarna, log in to the Klarna app, and select the pay in-store option. Now select the store you want to make a purchase from and follow the prompts to create a digital card. 

Now you can add the card to your digital wallet and set it as your default card to complete the purchase. You can use this to make purchases in the future.

4. Refund Policy

Klarna takes 14 days to process a refund. Once your refund or cancellation has been registered by the store, you will receive your refund. However, the refund is subject to the store’s policies. 

The refund status can be seen via the Klarna app for tracking.

5. Rewards Program

You can join the Klarna rewards club for free to earn points on your shopping. You will get 1 point for every dollar you spend. However, you can not earn points on payments made via Klarna card

The expiration of rewards depends on the individual reward, which will be mentioned on the delivery page of each reward.

All rewards are assigned with a unique code that can be redeemed only once. Once you open a new reward, you will have 90 days to redeem it before it expires.

Moreover, once you have claimed a reward, it can not be changed to another one.

How To Signup

You can easily sign up for Klarna by installing the app and following the prompts. If you do not have an account, you can still proceed with the buy now pay later option and select Klarna.

Now you will be asked to insert details. Your account will be created once your order gets approved. You can use this account to make purchases in the future.

Afterpay vs Klarna: Which One Is Best For You?

Afterpay Pros


  • There is no signup fee required in Afterpay. 
  • You can easily use it for online and in-store shopping.
  • Secure mobile payments with fraud detection
  • Interest-free four equal installments.

Afterpay Cons


  • The late fee will be applicable if you miss a repayment due date.

Klarna Pros


  • Interest-free installments. 
  • No account fee is required.
  • Extended payment terms.

Klarna Cons


  • Extended payment costs you a small fee .

Bottom Line

Afterpay and Klarna are both good point sale installment programs. However, both cater to slightly different locations and brands.

But the basic features are similar with slightly different terms and conditions.

For example, the late fee in Afterpay is slightly higher than that of Klarna.

Late fees impact consumers' experience with "buy now, pay later" services. Customers must be on time on payments to pay more with Afterpay than Klarna.

Consumers should understand these fees, as they influence the total cost of purchases. Knowing the penalties of each service helps consumers make informed decisions and manage payments effectively.

With that, my vote in the Afterpay vs Klarna comparison goes to Klarna because of its flexibility, popularity, and stability. Depending on your needs, you can use the one which suits you best.