Sezzle vs Klarna: Buy Now Pay Later Services

Choosing the Ultimate BNPL Solution

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Figuring out which BNPL service to choose between Sezzle vs Klarna isn’t always easy. As these kinds of financial products continue to gain popularity, Buy Now Pay Later services are appearing in droves. Many of them, like Sezzle and Klarna, seem to have a lot in common.

Of course, just like any product, there are some major differences to consider when we dive beneath the surface. While both Sezzle and Klarna will both help you spread the costs of larger payments, they may differ somewhat when it comes to fees and conditions.

If, like many people in the last couple of years, you’ve found yourself turning to buy now pay later tools as a way of managing your finances, it helps to know which service is best. Here’s your guide to the differences between Klarna and Sezzle.

Sezzle vs Klarna: An Introduction

Buy Now Pay Later apps generally provide a very similar service. Recently, demand for these solutions has increased significantly, in part due to the pandemic. Consumers with limited access to finances have needed more opportunities to spread the cost of larger purchases. Sezzle and Klarna both allow for this, by giving you a kind of interest-free loan to pay back via instalments.

Both Sezzle and Klarna will ask you to pay for a portion of an item upfront, then make the rest of your payments on a schedule. For instance, you may pay a small amount of what you owe on a weekly basis, or every month.

What is Klarna?

klarna homepage - sezzle vs klarna

Klarna is one of the better-known buy-now-pay-later applications available for consumers today. The chances are you’ve already seen the company’s service connected with some of your favorite stores. Klarna is available in ten nations across the globe. It allows you to pay what you owe in three instalments, or in a month’s time.

What is Sezzle?

sezzle homepage - klarna vs sezzle

Sezzle is only available in Canada and the US right now, but merchants from other regions can sign up for the service too. Over 34,000 stores are now connected with Sezzle. The popular system involves paying what you owe in a series of four sessions. Alternatively, you can consider taking out a longer loan, but you may need to pay interest in some cases.

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Sezzle vs Klarna: How They Work

Part of what makes buy now pay later solutions so popular these days, is how easy it is to get involved. Sezzle and Klarna won’t charge you any interest on your “loans”, provided you follow the instructions for paying back what you owe on-time.

If you pay for everything according to the plan provided, then you won’t have to worry about any damage to your credit score either.

Both Sezzle and Klarna have their own dedicated applications you can use to search for products from your preferred stores. Sezzle offers access to more than 44,000 brands where you can shop as much as you like. Once you find the store you want to shop with, you’ll simply add the products you like to your cart as normal, then choose the “Sezzle” payment option.

At the checkout, you can decide how you’re going to split your payments (Such as paying over a course of four transactions, or six). Sezzle will allow you to pay for items in-person too. You can create a virtual card which you can add to your Google or Apple pay application for in-store transactions. However, these virtual cards only work with some stores.

Klarna also has a dedicated app available for shoppers, but the company’s collaboration with many leading merchants also means you can find Klarna naturally embedded into a number of checkouts throughout the ecommerce world. Once you sign up for a Klarna account, you’ll be able to select the service at checkout and decide how you’re going to pay for what you owe.

Klarna allows you to pay for items in three instalments, or you can pay back what you owe in thirty days. There’s also the option to make one-time cards on t he Klarna app so you can pay for what you want in-person at point-of-sale systems too.

Klarna will put a limit on how much you can reasonably spend. This could mean you get an “error” message when you attempt to buy something beyond what you can reasonably afford to pay back.

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Sezzle vs Klarna: Credit Requirements

Although Buy Now Pay Later solutions can feel very different to loans and credit cards, it’s important to remember you are still borrowing money. With this in mind, it’s worth looking into the credit requirements associated with both services.

Sezzle makes signing up for an account quick and simple. You’ll be asked for some basic information about you when you create an account, and then Sezzle will conduct a “soft” credit check. This means you won’t have any impact on your credit score when Sezzle checks your affordability. However, your loans may be reported to the credit bureau, along with any late payments.

Klarna is similar to Sezzle in that it also performs a soft credit check. This once again won’t leave any marks on your credit report. However, if you start failing to pay back what you owe on time, there’s a risk your credit rating could begin to drop.

Notably, it is possible for credit checks to lead to a buy now pay later service suggesting you shouldn’t continue with the application. If you’re in a difficult position financially, giving you more credit could be a very dangerous thing to do. If you’re rejected or told you cannot borrow money with either of these services, think twice before seeking a solution with no credit check.

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Sezzle vs Klarna: Fees

As mentioned above, lack of initial fees is one of the most appealing things about buy-now-pay-later services. You shouldn’t need to pay any interest on your purchases if you can ensure you pay back what you owe according to your instalment plan.

All borrowing methods have fees to consider, whether it’s the interest rates you encounter when paying off your loan, or late fees from failing to make an installment payment on time.

One of the major selling points of tools like Sezzle and Klarna, is they don’t charge any interest until you’re not paying what you owe according to the agreed term. Similar to other BNPL solutions like Afterpay and Affirm, Klarna and Sezzle keep everything “interest free” for as long as possible.

There are limitations on what you can borrow because of this. Klarna can offer up to $1000 in “credit” to begin with, similar to a credit card. However, the limit can be increased depending on your account status. If you pay everything you owe on time, your limit will go up.

Sezzle features a $2,500 limit, but before you make the purchase, you’ll have to have your affordability levels checked by Sezzle. This ensures you can handle the repayments without stacking up late fees. Late fees are one of the ways BNPL providers make money.

Klarna offers users a total of 6 weeks to pay back what they owe, with the first payment on the day of the purchase. The rest of the payments are taken from your bank or debit card every two weeks. If you need additional time, you can “snooze” your payments too.

Sezzle works in a similar way, giving you 6 weeks to pay back what you owe, with the first transaction happening on the first day you shop.

Since Klarna is available in a variety of locations around the world, the late fee will differ depending on where you’re shopping. In the UK, the late fee has been removed entirely. In the US, you’re charged between $7 and $35 per month for every month of missed repayments.

Sezzle charges a $10 late fee when you miss a repayment, and you’ll have your account deactivated if you fail to pay this cash within the next 7 days.

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Klarna vs Sezzle: Mobile app

The majority of the BNPL services you access via both Klarna and Affirm are offered through a mobile app. Available on Android and Apple phones, the apps allow you to access exclusive discounts online, while ensuring you can manage your accounts.

Klarna’s app offers access to over 200,000 retailers, with an additional option to create a “virtual card” which you can use to shop with any retailer not currently offering Klarna. The app also comes with a “rewards” club, where you can earn cashback on your purchases, and automatic price drop alerts, so you can see which products on your wish list are available for less.

Sezzle’s mobile app works in a similar way to the tool from Klarna. You can see available deals from your favorite providers, as well as accessing information about your upcoming payments. This makes it easier to keep track of how much you can expect to spend each month.

The app also allows you to reschedule your payments, change your payment methods, and set up reminder notifications when a payment is due.

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Klarna vs Sezzle: For Businesses

While Klarna and Sezzle have a lot to offer today’s consumers, thanks to interest-free payments, these tools can also support companies in growing, by giving them more ways to allow consumers to pay for online shopping. Adding the option or interest-free payments to your store is an excellent way to attract the attention of shoppers with less cash.

All over Australia, Sweden, the United Kingdom, and US, today’s shoppers are looking for online stores which offer more modes of payment and repayment. Giving your shoppers more freedom could increase your conversions and improve your cash flow.

Klarna is already popular among some of the world’s biggest retailers. All you need to do is sign up for a merchant account with the service, and you’ll be able to add the Klarna payment option to your website. You’ll be paid the cost of any items or services in full, upfront, while your customers pay overtime. You can even integrate Klarna into your app or offline store.

Klarna charges a fee of around 2.49% plus a small cost of around 20 pence GBP, or 2.99% plus 30 cents in the US. There aren’t any contracts to worry about if you want to remove Klarna from your store.

Sezzle works in a similar way to Klarna, making it easy for merchants to set up buy now pay later services for customers. The functionality of Sezzle is very straightforward, and you receive your money immediately, while your customers only have to make their first payment upfront, before following with installment payments.

There’s a 6% fee for each transaction for merchants using Sezzle, as well as a processing fee. The exact cost to access Sezzle functionality for your store can vary depending on where you are in the world. Make sure you do your research before signing up. Neither Sezzle nor Klarna are particularly transparent with how much they charge businesses.

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Klarna vs Sezzle: Customer Service

Sezzle operates in Canada, the Bahamas, Moldova, and various other locations, Klarna is available all around the world, offering services like buy-now-pay-later, repeat purchases, and finance. Unlike Sezzle, Klarna also allows users to take out short-term loans.

There’s a pay-in-30-days offering, which allows you to pay off what you owe in 30 days with no interest. Alternatively, you can choose a 6 to 36 month financing option with interest rates starting at 19.99%. You will see a change in your credit score depending on how you manage these loans.

Due to the wider range of services from Klarna, you’d also expect a higher level of customer service. However, there’s really just basic phone support, email, and a help section on the website. Some users have complained getting a response to questions takes a lot longer than expected.

Sezzle might be a little smaller than Klarna, but it’s phone call and email support tends to be a lot faster, according to customer reviews. Of course, your experience may differ to that of other customers.

Klarna vs Sezzle: Finishing Thoughts

Klarna and Sezzle offer very similar services for both customers and merchants. If you’re looking for a convenient way to bring payment plans to your Shopify store, Klarna and Sezzle have a range of integrations to make this process easy.

Similar to other leading Buy Now Pay Later Solutions, both offer a quick way to manage payments with interest-free installments. However, there are always risks associated with buying anything you don’t pay for up-front.

While Klarna offers a wider range of services, similar to leaders like PayPal, Sezzle can provide faster customers service in some cases.

Rebekah Carter

Rebekah Carter is an experienced content creator, news reporter, and blogger specializing in marketing, business development, and technology. Her expertise covers everything from artificial intelligence to email marketing software and extended reality devices. When she’s not writing, Rebekah spends most of her time reading, exploring the great outdoors, and gaming.

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