Comparisons
Klarna vs Pay by Bank: Shopify UK Fees & Refund Costs Compared (2025)
Key Takeaway
- Klarna feesUp to 6.32% per order
- Klarna refundsYou lose the full fee
- Pay-by-Bank (Wallid)0.7% + 25p flat, instant/same-day payouts, no chargebacks
- Payout speed
- Klarna 3–5 days
- Pay-by-Bank instant
Klarna UK Fee Structure
Klarna is a popular BNPL option for UK shoppers — but for Shopify merchants, it brings stacked fees, non-refundable charges, and delayed payouts
- Pay Over Time4.99% + £0.20 per transaction
- Pay Later2.90% + £0.20 per transaction
- Refund Fees❌ Not refunded (you absorb it)
- Chargeback FeesVariable — usually £15–25
- Currency Conversion1–2% if FX applies
- Shopify Surcharge0.5% – 2% on top of Klarna’s fee
Example on a £100 order with
Pay Over Time
Klarna fee = ~£5.32
Shopify surcharge (0,5% -2% depending on your plan) = £1.00
Total = £6.32 (6.32% of order value)
Note: Klarna fees may vary and are provided for informational purposes based on publicly available data. Last updated: 31.03.2025
Shopify surcharge (0,5% -2% depending on your plan) = £1.00
Total = £6.32 (6.32% of order value)
Note: Klarna fees may vary and are provided for informational purposes based on publicly available data. Last updated: 31.03.2025
Compare Fees, Refunds, and Payout Speed across Klarna, Shopify Payments, and Pay-by-Bank for UK Merchants in 2025
| Feature | Klarna (via Shopify) | Shopify Payments | Pay-by-Bank |
|---|---|---|---|
| BNPL Support | ✅ Yes | ❌ No | ❌ Not yet |
| Shopify Surcharge Applied? | ✅ Yes | ❌ No | ✅ Yes |
| Transaction Fee (avg) | 4.99% + £0.20 | ~1.7% + £0.25 | ~0.7% |
| Refund Fee Refunded? | ❌ No | ⚠️ Partial | ✅ Yes |
| Payout Time | 3–5 business days | 1–3 days | Instant |
| Chargebacks | ✅ £15–25 | ✅ £15–25 | ❌ None |
Klarna’s True Cost to Your Margin
Even though Klarna is convenient for customers,
it can quietly erode profit for merchants
it can quietly erode profit for merchants
-
Refunds aren’t fee-free
You lose Klarna’s full fee even if the product is returned -
Fixed fees hurt low AOV
£0.20 on a £10 order = 2% before % fees apply -
Payouts are delayed
3–5 days vs instant alternatives -
Double fees
Shopify adds a % just for using Klarna
Klarna Costs by Industry
-
Apparel
High return rates = unrecovered fees -
Beauty
Low order values = high fee % -
Luxury Goods
Large ticket = 5% fee eats margin fast -
Marketplaces
Volume + refunds = stacked losses
Klarna Costs by Industry
| Industry | Hidden Cost Factor |
|---|---|
| Apparel | High return rates = unrecovered fees |
| Beauty | Low order values = high fee% |
| Luxury Goods | Large ticket = 5% fee eats margin fast |
| Marketplaces | Volume + refunds = stacked losses |
Klarna Refunds:
You Still Pay the Fees
-
A customer returns a product. Klarna refunds them. - You refund the customer — but Klarna keeps its fee.
- For merchants with 10−20% return rates, this becomes a major margin sink.
Why Use Klarna at All?
Despite high fees, Klarna still offers value
-
Attracts younger shoppers who prefer flexible payments - Improves conversion rates through brand trust and familiarity
- Klarna app exposure gives you extra traffic and visibility
- Use it as a conversion tool — not your default.
Why Use Klarna at All?
Despite high fees, Klarna still offers value
- Attracts younger shoppers who prefer flexible payments
- Improves conversion rates through brand trust and familiarity
- Klarna app exposure gives you extra traffic and visibility
- Use it as a conversion tool — not your default.
Klarna Strategy Tips for UK Merchants
- 1.Limit Klarna to orders over £100 to reduce fee impact
- 2.Negotiate lower Klarna rates if you’re high volume
- 3.Clearly label Klarna as a premium method
- 4.Audit your Klarna fees monthly in the Klarna Merchant Portal
- 5.Add Shopify Payments or Pay by Bank as your default checkout options
Where to Check Klarna Fees for Your Store
- Shopify Admin → Settings → Payments → Klarna
- Klarna Merchant Portal → Reporting section
- Contact Klarna UK directly for contract-specific rates
Final Thoughts
Klarna gives UK customers flexibility — but at a real cost to merchants.
With stacked fees, payout delays, and refund penalties, Klarna should be treated as a conversion tool, not your default checkout method.
With stacked fees, payout delays, and refund penalties, Klarna should be treated as a conversion tool, not your default checkout method.
-
To protect profit in 2025
- Use Klarna strategically
- Offer low-cost alternatives like Pay by Bank
- Build checkout flows that serve both conversion and cost-efficiency
What Our Clients Say About Us
FAQ
Klarna vs Pay-by-Bank on Shopify
Klarna vs Pay-by-Bank on Shopify
Klarna charges 4.99% + £0.20 per transaction for “Pay Over Time” and 2.9% + £0.20 for “Pay Later.”
Shopify surcharges (0.5%–2%), non-refundable fees, and delayed payouts add up.
Total fees on a £100 order can exceed £6.32.
Shopify surcharges (0.5%–2%), non-refundable fees, and delayed payouts add up.
Total fees on a £100 order can exceed £6.32.
Yes. Pay-by-Bank averages ~0.7% per transaction, includes full refunds, and has no chargebacks.
No. Klarna is best used as a conversion tool for high-ticket orders, not your default option.