Splitit vs Klarna: a complete BNPL comparison for businesses
Choosing the right buy now, pay later (BNPL) solution for your business is crucial for maximizing conversions and improving customer satisfaction. While Klarna is one of the major ‘buy now pay-later’ options that pop up at the checkout, alternative payment solutions like Splitit offer unique advantages that many retailers overlook. The best solution depends on your customer base, business model, and growth goals.
In this comprehensive breakdown, we’ll dive into the key differences between Splitit’s installment payment platform and Klarna’s buy now, pay later offering. From fees and customer experience to integration capabilities and merchant benefits, you’ll have the insights you need to make the right choice for your business.
How Splitit’s installment payment platform works
Splitit is an installment-based payment platform that works by using customers’ existing credit cards rather than creating new lines of credit. This approach eliminates credit checks, application processes, and third-party redirects that can increase checkout abandonment. Customers with credit cards already have everything they need to create an affordable, manageable, installment plan.
When it comes to approval, it’s all based on the current balance that’s available on the customer’s credit card.
The platform operates through a simple pre-authorization system. When customers choose Splitit at checkout, the full purchase amount is pre-authorized on their credit card. However, only the first installment is charged immediately. Subsequent payments are automatically deducted monthly according to the chosen repayment schedule (3-12 months, depending on merchant settings).
Splitit’s white-label integration maintains complete merchant control over the customer experience. The platform seamlessly integrates into your existing checkout flow, preserving your brand identity throughout the entire payment process. Customers never leave your site or encounter third-party branding – they simply enter their credit card information and select their preferred installment schedule. This streamlined approach protects your customer relationships while delivering the payment flexibility that drives higher conversion rates.
What this means for your customers:
- Zero applications or credit checks
- No new accounts to manage
- They keep earning their credit card rewards
- Absolutely no fees, interest, or penalties
- Instant approval based on available credit
What this means for your business:
- Industry-leading 80%+ approval rates
- Average order values of $1,200+
- 30% boost in conversion rates
The customer won’t pay any fees, penalties, or additional interest (besides any existing fees that are charged by the credit card provider).
How Klarna’s BNPL solutions work
Klarna offers three distinct payment methods, each serving different customer needs and financial situations.
Pay in 4
Klarna’s most popular option divides purchases into four equal payments over six weeks. The first payment is due at checkout, with remaining payments automatically charged every two weeks. This service requires a soft credit check and supports purchases between $35-$1,000.
Pay in 30 days
This option allows customers to receive their order before making any payment. After a soft credit check, approved customers have 30 days to pay the full amount interest-free. This “try before you buy” approach particularly appeals to fashion and lifestyle retailers.
Klarna financing (via WebBank)
For larger purchases, Klarna partnered up with WebBank to offer traditional financing with monthly payments and interest rates up to 29.9% APR. This option requires a hard credit check and creates a new line of credit through WebBank, making it suitable for high-ticket items.
Important considerations for Klarna users:
- Late payment fees of $7 or up to 25% of installment amount
- Insufficient funds fees up to $27
- Potential negative impact on credit score for missed payments
- All transactions occur under Klarna branding with third-party redirects
Splitit vs Klarna: customer experience breakdown
| SPLITIT | KLARNA | |
| Application required | No | Yes |
| Credit check | No (consumers have already been checked and approved to obtain their credit card) | YesHard credit check for financing Soft credit check for Pay in 4 and Pay in 30 days |
| Tied to credit rating | No (besides interest that may already be charged by your credit card provider if you don’t pay your monthly bill) | Yes, interest charged on Klarna Financing ranges between 0%-29.99% APRNo interest for Pay in 4 and Pay in 30 days |
| Payment method | Credit card | Credit card, debit card, or bank account |
| Credit card rewards captured | Yes | No – Klarna has an internal rewards program |
| Repayment triggering | Automatic | Automatic |
| Early repayment option | Yes (no fees) | Yes |
| Number of Installments | Flexible 3-12 months, it depends on the retailer (equal monthly payments) | Pay in 4: 4 payments every 2 weeksPay in 30: 1 payment after 30 days Financing: Monthly payments across 3 or more months |
| Associated shopper fees | None | Klarna financing: up to 29.9% APRLate fees: $7 or up to 25% of first installment Insufficient fund fees: $27 |
| Spending limit | Dependent on credit card limit and availability | No set spending limit for Pay in 30 days or Klarna financing – depends on limits set by the retailer and customer purchasing powerPay in 4 is limited to purchases between $35 and $1,000 |
Splitit vs Klarna: retailers experience breakdown
| SPLITIT | KLARNA | |
| Fees for retailers | Varies: Up to 6.5% per transaction, plus a flat fee | $0.30 fixed fee + 5.99% for Pay in 4 and Pay in 30 days$0.30 fixed fee + 3.29% variable fees for Klarna financing |
| Payout terms | Flexible options – upfront payment options or in line with customer repayment | Retailer is paid upfront in full, in line with a payout schedule and with time factored in for a payout delay |
| Purchase Limit | Based on consumers available credit limit. Can be set by merchant | $1,000 for Pay in 4 Set by the merchant for Pay in 30 days and Klarna financing |
| Obtaining Customer Data | No – does not retain data or re-market to a merchant’s customer base | Yes – Klarna may share customer data with third-parties |
| In-Store Solution | Yes | Yes |
| International Capabilities | Global | Sweden, Norway, Finland, Denmark, Germany, Austria, the Netherlands, Belgium, Switzerland, France, Italy, Poland, Spain, Portugal, Great Britain, Hungary, Czech Republic, Slovakia, the USA and Australia |
| Key Partnerships | Shopify, SFCC, Wix, Magento, BigCommerce, SAP and WooCommerce | Shopify, WooCommerce, Adobe Commerce, SFCC, EPiServer, PrestaShop, Wix |
| Site integration | Seamless (integrated into retailer’s checkout) | Integrated into retailer’s checkout under Klarna brand. Consumer is redirected to Klarna to complete the application. |
A BNPL customer expereince comparison
The customer journey differs significantly between these BNPL providers, impacting both conversion rates and long-term customer satisfaction.
Application and approval process
Splitit: No application or credit check required. Instant approval based on available credit card limit ensures a frictionless checkout experience.
Klarna: Requires application and credit check (soft or hard depending on product) since Klarnas financing is like a traditional loan. This additional step can increase checkout abandonment, particularly among privacy-conscious consumers.
Payment method flexibility
Splitit: Exclusively uses credit cards, allowing customers to maintain their existing rewards programs.
Klarna: Accepts credit cards, debit cards, and bank accounts. However, customers forfeit credit card rewards when using Klarna’s internal payment system.
Fee structure and penalties
Splitit: Completely free for consumers with no late fees, interest charges, or penalties as long as they pay their monthly credit card bill in full. Standard credit card terms will apply. If Splitit is unable to collect an installment, such as due to card failure, the remaining balance may be charged in full after 7 days.
Klarna: While Klarna’s Pay in 4 and Pay in 30 Days options are interest-free, late or missed payments can incur fees up to $7 or 25% of the first installment. If a payment fails due to insufficient funds, an additional fee of up to $27 may apply.
Customer payment periods
Splitit: Splitit lets customers choose flexible monthly or biweekly payments, and payments are automatically charged to their credit card.
Klarna: Klarna offers a variety of repayment options: Pay in 4 splits the cost into four biweekly payments; Pay in 30 lets customers pay the full amount 30 days after the order is processed; and Klarna Financing allows for monthly payments over 3 months or more.
A BNPL business experience comparison
Understanding the true cost of BNPL services requires examining both visible fees and hidden costs like chargebacks, customer service, and integration complexity.
Pricing structure for merchants
Splitit: Splitit offers flexible, customized pricing based on your business needs. Merchants receive a guaranteed full transaction amount upfront, while customers pay over time. Our sales team can give you a fast quote, get in touch today.
Klarna: The pricing structure for merchants varies by payment option. For both Pay in 4 and Pay in 30 days, merchants are charged a $0.30 fixed fee plus 5.99% per transaction. For Klarna Financing, the fee is $0.30 plus a lower variable rate of 3.29%.
Customer data
Splitit: Splitit doesn’t retain customer data or remarket to your customers. You maintain complete control over your customer relationships.
Klarna: This platform builds detailed customer profiles and may share data with third parties. They’re essentially building their own customer base using your traffic. Some retailers find themselves competing with Klarna’s own promotional emails sent to customers who originally discovered products on their site.
Merchant payment periods
Splitit: Merchants receive the full purchase amount upfront, regardless of the number of installments the shopper selects. This helps improve cash flow while still offering customers the flexibility to pay over time.
Klarna: Retailers receive customer payouts upfront, based on the payout schedule outlined in their initial contract. Klarna also applies a ‘payout delay’ to help manage returns and invoice adjustments. While the exact timing varies, payouts typically follow a weekly cadence, including the delay period.
Site integration
Both platforms integrate with major e-commerce platforms including:
- Shopify
- WooCommerce
- BigCommerce
- Magento
- Salesforce Commerce Cloud
However, Splitit’s seamless integration keeps customers on your site, while Klarna redirects users to complete applications on their platform.
Choosing the right BNPL solution for your business
The optimal BNPL provider depends on your specific business model, customer base, and growth objectives.
Choose Klarna If:
- Your average order value is under $200
- You can leverage Klarna’s brand recognition for customer acquisition
- Your customers prefer debit cards or bank transfers
- You operate primarily in established Klarna markets
Choose Splitit If:
- You sell higher-ticket items ($500+)
- Brand consistency is crucial to your customer experience
- Your customers value credit card rewards (common with affluent demographics)
- You’re planning international expansion
- You want the highest possible approval rates
- Customer data ownership matters to your long-term strategy
With Splitit, they can avoid late fees and additional interest on their credit card. There’s no need to take out a new line of credit or trigger any impact on their credit profile. They can make large purchases and repay at a pace that suits their budget and lifestyle.
Want to see how Splitit could work for your specific business? Connect with our merchant team for a personalized analysis of potential impact on your conversion rates and average order values.
Looking for more BNPL comparisons? Check out our detailed analyses of:
- Splitit vs Affirm: Which Builds Better Customer Relationships?
- Splitit vs Afterpay: The Merchant Benefits Breakdown
Frequently Asked Questions about Splitit vs Klarna
Do customers pay fees with either service?
Splitit charges no fees to customers. Klarna’s Pay in 4 and Pay in 30 are fee-free when paid on time but include late fees and penalties. Klarna Financing charges up to 29.9% APR.
Can customers earn credit card rewards with both services?
Only Splitit allows customers to earn credit card rewards since payments process through their existing credit cards. Klarna customers forfeit rewards when using Klarna’s payment system.
How do the services handle returns and refunds?
Both services support standard return processes. Splitit refunds process through the original credit card, while Klarna handles refunds through their platform with potential processing delays.
What credit limits apply to each service?
Splitit limits depend on the customer’s credit card limit and merchant-set maximums. Klarna’s Pay in 4 caps at $1,000, while other Klarna products have merchant-determined limits.
Which service is better for international merchants?
Splitit offers global coverage through a single integration, making it more suitable for international expansion. Klarna requires separate setups for different markets.
Information correct at time of publishing, source: Klarna.com and Productmint.com
