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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.

  • 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