Klarna with Practice Better Payments

⚠️ Buy Now, Pay Later for Practice Better Payments is currently in an Early Access Program and is not yet available for all users.  

The BNPL methods supported through Practice Better Payments include Klarna, Affirm, and Afterpay, Clearpay, and Cash App Afterpay. 

Review the parent article for an overview and links to each respective payment method article. 

In this article:

• What is Klarna?
• Klarna Payment Options
• Timing of Payouts (deposits)
• Client Experience at Checkout
• Geographic Availability
• Transaction Limits
• Processing Fees
• Managing Refunds
• Understanding Disputes
• Frequently Asked Questions

What is Klarna?

Klarna is a global BNPL payment provider that gives your clients multiple ways to pay over time. When clients choose Klarna at your Practice Better checkout page, they're redirected to Klarna's secure site where they see available payment options based on the purchase amount, their credit history, and their payment history with Klarna. 

After selecting their preferred payment plan, clients return to Practice Better to complete their purchase and gain access to your services.

Klarna handles all payment collection directly with your clients. You receive the full payment upfront and never need to follow up on installments.

Klarna Payment Options

Klarna presents your clients with different payment options depending on the purchase amount and the client's individual credit profile. Clients see between one and four options at checkout based on what they qualify for.

Pay in Full

Clients pay for the purchase immediately using a linked card, bank debit, or bank transfer. This is a standard payment option with no installments.

Pay Later (Pay in 30)

Clients pay the full amount in a single payment 30 days after the purchase. This option is interest-free with no fees when paid on time.

Purchase Range: Typically available for purchases up to $1,000 USD (varies by market)

Pay in 3 or 4

Clients split the purchase into three or four equal, interest-free installments paid every two weeks. The first payment (typically 25% of the total) is due when the order is confirmed, with remaining payments automatically charged every two weeks.

Purchase Range: Generally available for purchases between $35-$1,000 USD (may vary by merchant and market)

Financing

Clients pay over a longer term of 6 to 36 months with fixed monthly payments. These longer-term plans may include interest ranging from 0% to 35.99% APR, depending on the client's creditworthiness. The exact interest rate and payment schedule are disclosed upfront before the client commits.

Purchase Range: Typically available for purchases between $149-$10,000 USD

📍 Note: Not all payment options display to every client. Klarna makes individual approval decisions for each purchase based on the client's credit history, outstanding balance with Klarna, purchase amount, and payment behavior.

Timing of Payouts (deposits)

Standard payouts from Klarna transactions will be deposited into your business bank account 2-3 business days from the initial transaction date for most countries. However, some banks may take an additional 2-5 business days to show the funds in your balance after Klarna sends them.

Viewing Klarna Transactions

Monitor all Klarna transactions through your Payments Dashboard:

1. In your Practice Better portal, go to Settings > Payments Dashboard.
   
    
2. Go to the Payments & Disputes tab to review your history of transactions in detail.
    
3. Filter by Payment method to view all Klarna transactions.
   

Learn more about Using the Practice Better Payments Dashboard →

Client Experience at Checkout

When your clients choose Klarna, here's what they experience:

1. At checkout, clients select Klarna as their payment method.
    
2. Clients are redirected to Klarna's secure site.
    
3. First-time Klarna users: Clients enter their name, email, and phone number. Klarna sends a verification code via SMS to confirm their identity.
    
4. Returning users: Clients simply log in to their existing Klarna account.
    
5. Klarna instantly evaluates eligibility and presents available payment options (typically showing 1-3 options based on the client's credit profile).
    
6. Clients review the payment schedule, select their preferred option, and confirm their choice.
    
7. Clients return to complete the purchase and immediately gain access to your services.

✅ All Set: The entire approval process takes just seconds. Klarna uses soft credit checks for Pay in 4 and Pay in 30 options, which don't impact your client's credit score.

Geographic Availability

Klarna is available in the following countries: Australia, Austria, Belgium, Canada, Czechia, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Spain, Sweden, Switzerland, and the United Kingdom.

However, Klarna will only display as a payment option when your client's billing country (as listed in their profile), your Practice Better Payments account currency, and the invoice currency match.

Domestic Only Transactions (US, CA, AU, NZ) 

If your business and Practice Better Payments account is in the US, Canada, Australia, or New Zealand, Klarna will only display as a payment option when your client's billing country (as listed in their profile) and the invoice currency match your Practice Better Payments account currency.

Example: If your business is in the US and your Practice Better Payments account is USD-denominated, the invoice currency must be USD and your client’s billing country must also be in the US for Klarna to appear at checkout.

📍Klarna availability for US clients can vary by state.

Cross-Border Transaction Support (EU, EEA, UK, Switzerland)

If your Practice Better Payments account is based in the European Union (EU), the European Economic Area (EEA), the United Kingdom, or Switzerland, you may accept Klarna payments from clients located in any of those regions as long as the invoice currency matches the client's location and the client’s billing country is set correctly.

Example 1: If your business is in the UK and your Practice Better Payments account is GBP-denominated, for your Swiss client to see Klarna as a payment option, the currency of the invoice must be CHF and the client’s billing country must be set to Switzerland.

Example 2: If your business in Ireland and your Practice Better Payments account is EUR-denominated, for your UK client to see Klarna as a payment option, the currency of the invoice must be in GBP and the client’s billing country must be 

Transaction Limits

Klarna sets minimum and maximum transaction amounts for each payment option. If a purchase falls outside these limits, that specific Klarna option won't display to your client.

Pay in 4:

• Minimum: $10 USD (US market); varies by region
• Maximum: Typically $1,000 USD (may extend to $2,500 depending on merchant)

Pay Later (Pay in 30):

• Maximum: Typically $1,000 USD

Financing:

• Minimum: $149 USD
• Maximum: $10,000 USD

📍 Note: Individual clients may have lower limits based on their payment history with Klarna and their current outstanding balance. Klarna evaluates each purchase independently and determines eligibility in real-time.

*The maximum "Pay Later" limit in Germany is up to €10,000, but in France, Spain, and Italy, it is capped much lower at €500.

Processing Fees

Klarna processing fees vary based on your Practice Better Payments account currency and your client's location. Fees are automatically deducted from your payment before funds settle in your account.

📍 Note: The processing fee applied to transactions depends on the address, and specifically the country, associated with your client that is stored in Practice Better. 

Fee Structure

Each Klarna transaction incurs:

• A percentage-based fee (varies by region)
• A fixed fee per transaction
• Potential currency conversion fees if currencies differ

Understanding Fee Types

Currency Conversion Fee (1-2%): Applies when the currency your client uses for payment differs from your Practice Better Payments payout currency. For example, if your account receives payouts in USD but a client pays in EUR, a currency conversion fee applies.

Klarna Fees by Account Currency

USD-Denominated Practice Better Payments Accounts (US-based practitioners):

CAD-Denominated Practice Better Payments Accounts (Canada-based practitioners):

AUD-Denominated Practice Better Payments Accounts (Australia-based practitioners):

NZD-Denominated Practice Better Payments Accounts (New Zealand-based practitioners):

GBP-Denominated Practice Better Payments Accounts (UK-based practitioners):

EUR-Denominated Practice Better Payments Accounts:

CHF-Denominated Accounts:

SEK-Denominated Accounts:

NOK-Denominated Practice Better Payments Accounts:

DKK-Denominated Practice Better Payments Accounts:

PLN-Denominated Practice Better Payments Accounts:

RON-Denominated Practice Better Payments Accounts:

Managing Refunds

When clients request refunds for purchases made with Klarna, you process the refund through your normal system. Klarna then handles adjusting or refunding the client's payment plan.

How Klarna Refunds Work

1. Client Requests Refund: Your client contacts you to request a refund according to your practice's refund policy.
    
2. You Process the Refund: Process the refund through Practice Better or your Stripe Dashboard.
    
3. Klarna Adjusts Client's Plan: Klarna cancels any future installment payments the client owes and refunds any payments the client has already made.
    
4. You Repay Klarna: The refund amount is deducted from your future Klarna settlements or debited from your bank account.

Refund Time Limit

You can process Klarna refunds up to 120 days from the original purchase date.

⚠️ Important: Refunds requested after 120 days must be processed directly with your client using another payment method — Klarna will not be involved.

Partial Refunds

Klarna supports partial refunds. When you issue a partial refund:

• The client's payment schedule adjusts to reflect the reduced balance
• Payments already made are refunded proportionally
• The client continues making installments on the reduced amount

Transaction Fees on Refunds

Klarna processing fees are non-refundable. When you process a refund, the original transaction fees you paid are not returned to you.

Learn more about Processing Refunds in Practice Better →

Understanding Disputes

Klarna disputes occur when clients file complaints or return requests through the Klarna consumer app. Understanding the dispute process helps you respond effectively and protect your practice.

Dispute Process Timeline

Inquiry Period (21 Days): All Klarna disputes (except fraud claims) start as inquiries. During this period, you're not required to submit formal evidence. Instead, focus on contacting your client directly to resolve the issue.

Dispute Escalation: If the inquiry isn't resolved within 21 days, Klarna automatically escalates it to a formal dispute. At this point:

• The disputed amount is automatically deducted from your Stripe balance
• The dispute fee is also deducted
• Funds remain held until the dispute is resolved

Dispute Filing Window

Clients have 180 calendar days from the purchase date to file a dispute with Klarna.

⚠️ Important: In exceptional cases involving fraud, legal claims, consumer protection rules, or debt collection, Klarna may accept disputes beyond 180 days.

Dispute Types and Your Role

Payment Fraud (Handled by Klarna):

• Unauthorized transactions
• Account takeover
• Client inability to repay installments

For these disputes, Klarna bears the financial risk.

Service-Related Disputes (May Require Your Involvement):

• Services not delivered or not accessible
• Services not as described
• Quality or satisfaction issues

For these disputes, Klarna may request evidence from you such as:

• Proof of service delivery or access granted
• Communication records with the client
• Service description and terms agreed upon at purchase

Dispute Fees

If a dispute is resolved in the client's favor, you'll be charged a dispute lost fee based on your account currency (see fee tables above for amounts).

💡 Tip: Monitor disputes in your Practice Better Payments Dashboard. Responding quickly during the 21-day inquiry period by contacting your client directly often resolves issues before formal dispute escalation.

For detailed information about Klarna dispute reason codes and how to prevent disputes, visit ​​Klarna's documentation on Dispute Management → 

Frequently Asked Questions

What information do clients need to use Klarna?

First-time Klarna users provide their name, email address, and phone number. Klarna sends an SMS verification code to confirm their identity. Clients must be at least 18 years old and have a valid phone number. Klarna does not require Social Security Numbers for Pay in 4 or Pay in 30 options.

How long does Klarna approval take?

Klarna approval is instant. Clients receive an approval decision within seconds of submitting their information at checkout.

What happens if my client misses a Klarna payment?

Klarna automatically attempts to collect the payment again. If the second attempt fails, clients are charged a late fee of up to $7 USD (or equivalent in other currencies, capped at 25% of the purchase amount). The missed payment is added to the next scheduled payment. After multiple missed payments, Klarna may pause the client's account and, for payments overdue by 30+ days, may report to credit bureaus.

Will using Klarna affect my client's credit score?

For Pay in 4 and Pay in 30: Klarna performs a soft credit check that doesn't affect credit scores. These short-term payment options are currently not reported to US credit bureaus.

For Financing: Klarna may perform a hard credit check, which can temporarily impact credit scores. Interest-bearing loans may be reported to credit bureaus.

Which Klarna payment option will my client see?

The specific payment options displayed depend on:

• Purchase amount (each option has different thresholds)
• Client's credit history and payment behavior with Klarna
• Client's current outstanding balance with Klarna
• Klarna's real-time risk assessment

Clients typically see 1-3 payment options at checkout. The exact terms (including interest rates for financing) are disclosed upfront before clients commit.

Can international clients use Klarna?

Cross-border (non-domestic) BNPL transactions are supported only by Klarna, and only for businesses located in the EU, EEA, UK, and Switzerland. 

All other BNPL providers support domestic transactions only.

Can I advertise (on my website etc.) that I can accept Klarna?

Yes, you can promote Klarna on your website and marketing channels, provided you follow these core requirements:

• Use Approved Assets Only: Use official logos and banners from the Klarna Brand Portal. Do not alter brand colors or create custom logos.
• Include Required Disclosures: Any mention of "Buy Now, Pay Later" or installments must include clear, legible legal disclosures to inform customers of terms and risks.
• Be Socially Responsible: Your marketing must be honest and balanced. Avoid language that encourages overspending or creates a false sense of urgency (e.g., "Hurry!" or "Don't wait until payday").
• Regional Compliance (UK/EU): In the UK, you must use Klarna-approved messaging to avoid committing criminal offenses under the FCA's financial promotion rules. In the EU, credit advertising must remain clear and balanced under updated 2025 consumer protection laws.

For detailed regional rules and pre-approved messaging templates, visit the Klarna Marketing Resources page and locate your regional Compliance Guide.

💡 Need Help? Email payments@practicebetter.io with questions about Klarna payments. Our team can help you understand fee structures, settlement timing, and dispute resolution specific to your Practice Better Payments account.

Learn more about other BNPL options:

• Offering Buy Now, Pay Later Through Practice Better Payments (Overview) →
• Affirm with Practice Better Payments →
• Afterpay, Clearpay, and Cash App Afterpay with Practice Better Payments →