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Comparisons

Pay-by-Bank vs
Klarna on Shopify

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 Time
    4.99% + £0.20 per transaction
  • Pay Later
    2.90% + £0.20 per transaction
  • Refund Fees
    ❌ Not refunded (you absorb it)
  • Chargeback Fees
    Variable — usually £15–25
  • Currency Conversion
    1–2% if FX applies
  • Shopify Surcharge
    0.5% – 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

Klarna vs Shopify Payments vs Pay-by-Bank (UK)

Klarna vs Shopify Payments vs
Pay-by-Bank (UK)

Klarna’s True Cost to Your Margin

Even though Klarna is convenient for customers,
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’s True Cost
to Your Margin

Even though Klarna is convenient for customers, 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

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-boosting tool, not your default checkout method. Remember, depending on your integration and plan Shopify may apply third party payments fees.

  • 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

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Pay-by-Bank on Shopify

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Wallid Products

Pay-by-Bank Payment App

Wallid’s Pay-by-Bank app integrates directly with Shopify checkout, enabling instant bank payments, significantly lower transaction fees, and zero chargebacks.

Pay-by-Bank Express Checkout

Wallid’s Pay-by-Bank Express Checkout delivers a fast, frictionless experience by connecting directly to customers’ bank accounts — increasing conversion rates while lowering fees