7 Best Alternatives to Klarna for BNPL and Payment Solutions

Why look beyond Klarna

Klarna is a significant player in the buy now, pay later (BNPL) market, facilitating flexible payment options for consumers and providing merchants with tools to increase conversion rates and average order values. Its core offerings, such as Pay in 4 and Pay in 30 days, are widely adopted in e-commerce. However, businesses may explore alternatives due to various factors. Some merchants might seek lower transaction fees or more transparent pricing structures, as Klarna's rates can vary by product and country. Others may require a BNPL provider that integrates more seamlessly with their existing payment gateways or e-commerce platforms, or offers a broader suite of financial services beyond BNPL.

Additionally, some businesses may prioritize providers with different risk assessment models, aiming to minimize fraud or better manage chargebacks. The geographical availability and regulatory compliance of BNPL services also vary, prompting businesses operating in specific regions to look for local specialists. Finally, businesses with niche customer bases or unique checkout flows might find that other providers offer more customizable solutions or a better fit for their specific merchant and consumer needs.

Top alternatives ranked

1. 1. Affirm — Flexible installment loans for consumers

   Affirm provides consumers with point-of-sale financing options, allowing them to pay for purchases over time through simple, transparent installment loans. Unlike traditional credit cards, Affirm typically displays the total cost of a loan upfront, including any interest, without hidden fees or compounding interest. Merchants integrate Affirm into their checkout process, enabling customers to apply for loans directly. Affirm's financing options can range from bi-weekly payments to longer-term loans, depending on the purchase amount and merchant agreement. This flexibility aims to increase conversion rates and average order values for businesses by making larger purchases more accessible to consumers. Affirm performs a soft credit check that does not impact a consumer's credit score to determine eligibility. It is widely used across various retail sectors, including apparel, travel, and home goods.

   • Best for: Online and in-store merchants seeking flexible, transparent installment loans for customers, particularly for higher-value purchases.

   See our in-depth Affirm profile for more information. For integration details, refer to the Affirm official website.

2. 2. Afterpay — Interest-free installment payments for retail

   Afterpay specializes in interest-free installment payments, primarily targeting the retail sector and popular with younger demographics. It allows customers to pay for purchases in four bi-weekly installments without incurring interest, provided payments are made on time. Merchants receive the full purchase amount upfront, minus a transaction fee. Afterpay aims to boost sales, increase conversion rates, and attract new customers by offering a convenient and budget-friendly payment method. Its integration is straightforward for e-commerce platforms and can also be supported in brick-and-mortar stores. Afterpay's model focuses on smaller, more frequent purchases, differentiating it from providers that emphasize longer-term financing. The platform also offers a consumer app that helps drive traffic to partner merchants.

   • Best for: Retailers and e-commerce businesses looking to offer interest-free, short-term installment payments, especially to capture younger consumer segments.

   See our in-depth Afterpay profile for more information. For integration details, refer to the Afterpay official website.

3. 3. PayPal Pay Later — BNPL integrated within the PayPal ecosystem

   PayPal Pay Later is a suite of BNPL options offered by PayPal, leveraging its extensive existing merchant and consumer network. It typically includes options like Pay in 4, allowing customers to split purchases into four interest-free payments over several weeks, and longer-term financing solutions for larger transactions, often provided through PayPal Credit. For merchants, integrating PayPal Pay Later means offering these options directly within their PayPal checkout experience, potentially increasing conversion rates for the millions of consumers who already use PayPal. The primary advantage for merchants is the seamless integration with PayPal's established payment infrastructure and access to its large user base, which can simplify fraud prevention and payment processing. PayPal manages the credit risk and consumer financing, providing merchants with the full purchase amount upfront.

   • Best for: Businesses already using PayPal for payments and seeking to add BNPL options without complex additional integrations, benefiting from PayPal's extensive user base.

   See our in-depth PayPal Pay Later profile for more information. For integration details, refer to the PayPal Pay Later official website.

4. 4. Stripe — Comprehensive payment processing with BNPL integrations

   Stripe is a comprehensive payment processing platform that supports a wide array of payment methods, including credit cards, digital wallets, and increasingly, buy now, pay later options through direct integrations with providers like Affirm and Klarna, or its own Stripe Payments offerings. While Stripe itself is not a dedicated BNPL provider, its platform allows merchants to easily add and manage multiple BNPL services alongside traditional payment methods through a unified API. This approach offers merchants flexibility in choosing which BNPL partners to work with, consolidating their payment infrastructure. Stripe's strength lies in its developer-friendly APIs, global reach, and robust suite of tools for subscriptions, invoicing, and fraud prevention. Businesses can integrate various BNPL options through Stripe's checkout solutions, offering diverse payment choices to their customers.

   • Best for: Businesses requiring a full-stack payment platform with global reach and the flexibility to integrate multiple BNPL providers alongside other payment methods via a unified API.

   See our in-depth Stripe profile for more information. For integration details, refer to the Stripe documentation.

5. 5. Shopify Admin API — E-commerce platform with native BNPL support

   Shopify is an e-commerce platform that provides merchants with tools to build and manage online stores. While not a standalone BNPL provider, Shopify offers native integrations and support for various BNPL solutions, including its own Shopify Payments gateway, which can incorporate options like Shop Pay Installments. Through the Shopify Admin API, merchants can programmatically manage orders, products, customers, and payment methods, including those facilitated by BNPL providers. This allows for customized checkout experiences and automated workflows that include BNPL options. For businesses already operating on Shopify or considering it, leveraging the platform's native BNPL integrations simplifies implementation and management, as these solutions are designed to work seamlessly within the Shopify ecosystem. Merchants benefit from a unified dashboard for managing sales and payments.

   • Best for: E-commerce businesses using or planning to use Shopify, seeking seamless integration of BNPL services directly within their store's existing payment infrastructure.

   See our in-depth Shopify Admin API profile for more information. For integration details, refer to the Shopify Admin API documentation.

6. 6. Adyen — Global payment platform with diverse local payment methods

   Adyen is a global payment processing platform that supports a wide range of payment methods, including local payment options and various buy now, pay later (BNPL) providers across different regions. Similar to Stripe, Adyen offers a unified platform that enables merchants to accept payments from around the world. Merchants can integrate Adyen to offer BNPL solutions like Klarna, Afterpay, and others through a single API, streamlining their checkout process. Adyen's strength lies in its ability to handle complex international payment flows, fraud prevention, and comprehensive reporting. For businesses with a global presence or aspirations, Adyen provides the infrastructure to offer a localized payment experience, including relevant BNPL options, to customers in different markets. This approach simplifies the management of diverse payment methods and currencies.

   • Best for: Global enterprises and e-commerce businesses needing a single platform to manage international payments and offer a wide array of local payment methods, including various BNPL options.

   See our in-depth Adyen profile for more information. For integration details, refer to the Adyen documentation.

7. 7. Squareup — Integrated POS and payment processing for SMBs

   Squareup (Square) offers an ecosystem of point-of-sale (POS) hardware, payment processing services, and business tools, primarily catering to small and medium-sized businesses (SMBs). While Square's primary focus is on in-person and online payment acceptance, it also integrates with third-party BNPL providers to offer flexible payment options to its merchants' customers. For example, Square has partnered with providers to offer installment payments directly within its checkout flows, both online and in-store. This allows SMBs to provide BNPL options without requiring separate integrations or accounts. Square's appeal lies in its ease of use, integrated hardware and software solutions, and straightforward pricing. Businesses using Square for their POS and online sales can enable BNPL functionality to improve sales and customer satisfaction within their existing Square infrastructure.

   • Best for: Small and medium-sized businesses (SMBs) using Square's POS and online payment processing, seeking integrated BNPL options for both in-person and e-commerce sales.

   See our in-depth Squareup profile for more information. For integration details, refer to the Squareup developer documentation.

Side-by-side

How to pick

Choosing the right buy now, pay later (BNPL) or payment solution involves evaluating your business needs against the features and capabilities of each alternative. Consider these decision points:

1. Assess your primary objective:

   • If your main goal is to offer interest-free, short-term installments, similar to Klarna's Pay in 4, then Afterpay or PayPal Pay Later with its Pay in 4 option are strong contenders. Afterpay is particularly effective for attracting a younger, fashion-focused demographic, while PayPal leverages its existing vast user base.
   • If you need to facilitate larger purchases with longer-term financing options, potentially with interest, Affirm is specialized in transparent installment loans. Klarna also offers financing options, making it a direct competitor in this segment.

2. Consider your existing payment infrastructure:

   • If you already use PayPal for processing, integrating PayPal Pay Later is often the path of least resistance, leveraging your existing setup and reducing integration effort.
   • For businesses built on Shopify, utilizing Shopify's native BNPL integrations, such as Shop Pay Installments through Shopify Payments, offers seamless functionality and a unified management experience.
   • If you require a comprehensive payment processing platform that can integrate multiple BNPL providers alongside other payment methods, Stripe or Adyen provide the flexibility and global reach needed to manage diverse payment ecosystems from a single API.
   • Small and medium businesses using Square for POS and online sales will find its integrated BNPL options to be a convenient extension of their existing services.

3. Evaluate your customer base and geographical reach:

   • If your customer base is primarily in the US and Canada, Affirm is a strong choice.
   • For a broader international presence, particularly in Europe, the US, and Australia, Klarna remains competitive, but Adyen offers unparalleled support for localized payment methods globally, including various BNPL options specific to regions.
   • Afterpay has strong traction in the US, Canada, Australia, New Zealand, and the UK.

4. Examine pricing models and transaction fees:

   • Compare the transaction fees, setup costs, and any recurring charges across providers. While most BNPL providers charge merchants a percentage per transaction plus a fixed fee, the exact rates can vary significantly. Some providers may also have different rates depending on the BNPL product (e.g., interest-free vs. interest-bearing loans). Request detailed pricing from each alternative based on your anticipated transaction volume and average order value.

5. Consider fraud prevention and risk management:

   • BNPL services shift credit risk from the merchant to the provider, but understanding each provider's approach to fraud prevention and chargeback policies is crucial. Platforms like Stripe and Adyen offer advanced fraud detection tools as part of their broader payment platforms, which can be beneficial if you're consolidating payment processing. Specific BNPL providers like Klarna and Affirm also have their own robust fraud prevention systems.