It can be frustrating to cut your shopping lists due to insufficient funds.
While you can rely on your credit card overdraft to cover insufficient funds, the fees can add up quickly.
The coming of Buy Now, Pay Later apps like Klarna has made it possible to shop with no dime and pay later in installments.
The question is, is Klarna available in Canada? What does it take to use Klarna in Canada? What are Klarna alternatives in Canada?
This Klarna Canada review covers everything you need to know to make the best choice.
Table of Contents
Klarna is a financial technology company that was established in 2005 to offer payment and shopping solutions.
Headquartered in Stockholm (Sweden), Klarna
has 150 million clients and 450,000+ merchants across 45 countries.
In addition to direct payment solutions, Klarna is also popular for its pay-after-delivery service that allows shoppers to buy now and pay in four installments.
Some of the companies backing Klarna include Visa, Silver Lake, Sequoia Capital, Ant Group, Bestseller Group and Atomico.
Is Klarna Available in Canada?
Yes. You can access Klarna in Canada for your online and in-store purchases.
Like Americans, Canadians can also use Klarna to buy now and pay later with no interest rates or late payment fees.
The interesting part is that you can extend your installment payment duration to avoid late payment penalties with Klarna in Canada.
Overall, Klarna offers a seamless pay-after-delivery service to Canada.
How Does Klarna Operate in Canada?
The operating model of Klarna in Canada is the same as its operating model in other countries.
You need to follow the steps below to use Klarna in Canada.
- Download the App
- Create an account
- Use Klarna as your payment option at the delivery point
Upon making a purchase, Klarna will send you an email containing your payment schedule. The company allows you to repay the first of four installment payments at the checkout.
The other three installment payments will be automatically deducted from your linked card every two weeks.
If you have the means, you can clear off your debt ahead of the due date without incurring any penalty.
Klarna Canada Stores
With over 450,000 merchants, Klarna is accessible in several stores in Canada.
The following are some of the stores that accept payment with Klarna in Canada.
- Abigail Ahern
- Ana Luisa
- A Pea in the Pod
- Beauty Works
- Bed, Bath & Beyond
- Canada Goose
- Harry Rosen
You can visit the Klarna Canada website to learn more about the stores that accept it in Canada.
How Safe Is Klarna Canada?
Klarna is one of the safest and most legitimately recognized pay-after-delivery services in the world.
The company has advanced features that protect your information against fraudsters and unauthorized purchases.
As a legitimate pay-after-delivery company, Klarna doesn’t disclose your data to a third party without your consent.
How Much Does it Cost to Use Klarna In Canada?
The exciting thing about Klarna is that it doesn’t charge its customers any fee.
Unlike other pay-after-delivery services, Klarna doesn’t charge late payment fees.
That partly explains why the company has over 150 million customers worldwide.
How does Klarna make money? The company generates revenues from their partner stores. And having over 450,000 partner stores means a lot of profit for Klarna.
How to Open a Klarna Account in Canada
Becoming a Klarna customer is stress-free. The steps are easy to navigate for anyone that can operate a smartphone.
But before you can open a Klarna account in Canada, you need to:
- Be 18 years of age or older
- Have an existing bank account
- Have a good credit history
- Be debt free with Klarna
That’s all you need to be eligible for a Klarna Canada account. If you meet all these criteria, you can proceed to sign up with Klarna
To create a Klarna account, visit this link and click on the “create account” button. You will be required to enter your email address to proceed with the registration.
If you like, you can sign-up through the Klarna app that’s available on Google Play Store and App Store.
How to Repay a Klarna Loan in Canada?
Before now, Klarna used to deduct the four installment payments automatically after every two weeks.
However, you are now required to pay for the first of four installment payments after a purchase.
The three installment repayments are then deducted automatically. That’s, Klarna will automatically deduct the remaining installment payments from your linked card.
You are allowed to link credit or debit cards to your Klarna account except for AMEX or prepaid cards.
Bear in mind that you can repay your complete Klarna loan before the due date without incurring a penalty.
Is there a Penalty For Loan Defaulting With Klarna Canada?
Klarna doesn’t charge fees for late payments or payment defaults. This is one of the fantastic things about them.
If Klarna fails to make an automatic deduction from your account, it will keep trying as it notifies you through email.
But when you over-delay your loan repayment and Klarna could make an automatic deduction from your card, you may be reported to a debt collection agency.
A collection agency can take legal actions against you which could affect your credit profile and limit your credit access in the future.
In addition, Klarna reserves the right to terminate your contract with them if you keep up with the defaults.
The good news is that Klarna allows you to extend your repayment due date to avoid facing debt collection agencies.
Klarna Canada Pros and Cons
Each pay-after-delivery service has its pros and cons. The following are the good and ugly sides of Klarna in Canada.
Pros Klarna Canada
- Zero-interest pay-after-delivery: Unlike other pay-after-delivery services in Canada, Klarna doesn’t charge interest on its buy-now-pay-later services.
- No fees: One of the popular pay-after-delivery fees in Canada is late payment fee. Klarna doesn’t charge this fee nor any other fees on its buy-now-pay-later services.
- Flexible repayment options: In addition to allowing shoppers to make four installment payments on purchases, Klarna also allows you to repay your loan ahead of the due date without any penalty.
- Loan extension: Defaulting your loan repayment on Klarna could lead you to a debt collection agency. However, Klarna gives you the option to extend the loan to buy more time.
- Multiple partners: The company has over 450k partners worldwide. This makes it possible to get access to the majority of your favourite stores through Klarna.
Cons Klarna Canada
- Initial payment: Unlike other pay-after-delivery service providers, Klarna requires initial payment upon purchases. This makes it less reliable for those looking to make emergency purchases with no funds.
- Defaulting penalties: While Klarna doesn’t charge late payment fees, it reports defaulters to debt collection agencies. This is worse than a late payment fee.
- Zero impact on credit score: Klarna doesn’t report to any credit bureau. As such, your loan repayment with it will not improve your credit score.
Klarna Canada vs Afterpay Canada: Which to Choose?
|Instant payment of the first of four payments is required
|Instant payment of the first of four payments is required.
|Credit and debit cards (except prepaid and AMEX cards)
|Domestic Visa, AMEX, Mastercard (except Interac e-Transfers and foreign-issued cards)
|Late payment fees
Afterpay is also a pay-after-delivery service that’s available in 25 countries including Canada, UK, Europe, New Zealand, US and so on.
The company has 85k+ partner stores and 19 million active users. Of course, the figures are far below those of Klarna.
Notwithstanding, the expansion of Afterpay to Canada in 2020 has tightened up the competition among the existing pay-after-delivery services in the country.
With Afterpay, Canadians can also pay after delivery in four installment payments. Like Klarna, Afterpay also requires instant payment of the first (25%) payment of the four installment payments.
In addition, Afterpay doesn’t charge interest on pay-after-delivery services. Both Klarna and Afterpay allow you to extend your loan payment to avoid penalties.
Beyond these similarities, the two companies differ considerably. While Klarna doesn’t charge late payment fees, Afterpay charges $8 plus 25% value of your previous order.
The above table also shows how the two companies differ in terms of repayment methods. With Klarna, you can repay your loan using a credit or debit card.
On the other hand, Afterpay allows you to repay using a domestic Visa, AMEX or Mastercard.
Overall, you can see that Klarna is more cost-saving than Afterpay pay as it doesn’t charge late payment fees.
However, you should remember that the consequences of loan defaulting on Klarna could be more costly than Afterpay’s late payment fees.
Learn more: Afterpay Canada Review
What to Consider When Choosing a Pay-After-Delivery Service in Canada?
With different pay-after-delivery services in Canada, it’s essential to compare and contrast when looking for the best option.
Below is a brief overview of the key factors to consider when choosing the best pay-after-delivery service in Canada.
- Number of partners: As shown above, the number of partner stores varies from one pay-after-delivery service to another. Choosing a company with multiple partners will make it possible to access all your favourite stores in one place.
- Installment payments: If you’re looking for a pay-after-delivery service to cover emergency funding, it’s essential to consider the number of installment payments. This is because some pay-after-delivery services require initial payment while others don’t.
- Spending limit: Although most pay-after-delivery services don’t display this information, an inquiry about the spending limit could help you know the extent you can rely on the pay-after-delivery service provider.
- Interest and fees: Interest on pay after delivery service is not common in Canada. However, some companies charge late payment fees. To save costs, it’s essential to use a company that doesn’t charge interest and late payment fees.
- Repayment methods: The repayment methods of pay after delivery services vary. The more repayment methods a company has, the more flexible your repayment experience with it
Based on the above factors, you may find Klarna or Afterpay suitable/unsuitable for your needs.
The Bottom Line
That brings us to the end of this Klarna Canada review. Hopefully, now you have a better picture of what Klarna entails and how to use it in Canada.
But as you can see from the above review, there are many factors to consider before choosing any pay-after-delivery service.
Notwithstanding, you can’t go wrong with Klarna so long as it meets your needs.
If you need more help deciding which pay-after-delivery service to choose, kindly let me know in the comment below.
If you’re impacted by this review, visit our blog section to learn more about other related financial information such as:
- 15 Legit Ways to Make Money Fast in Canada
- 8 Proven Ways on How to Get Out of Debt in Canada Faster
- 8 Best Guaranteed Payday Loans No Matter What Canada
FAQs on Klarna Canada Review
What credit score does klarna require?
There’s no credit score eligibility to access Klarna in Canada. This makes the company accessible to individuals with different credit scores.
Although the company runs a soft credit check when processing pay-after-delivery applications and monthly financing.
Bear in mind that a soft credit check will not affect your credit score.
Does Klarna report to credit bureaus?
Klarna doesn’t report to any credit bureau. This means that your transactions with the company will not affect your credit score.
Does Klarna charge a fee?
Klarna doesn’t charge a fee for its buy-now-pay-later services. The company makes money by charging its partner stores administration fees.
Does Amazon accept Klarna?
Klarna accepts Amazon both for online and in-store purchases.
Which is better Klarna or Afterpay?
Klarna is better because it doesn’t charge late payment fees and it has multiple partners than Afterpay.
Is it worth it to use Klarna?
You’re in the right position to decide. If you’re comfortable with paying the initial of four installment payments, then you may find Klarna worthwhile.