Once someone comes to their checkout they hide or at least make the direct payment options well hidden so that by default people buy by taking credit with them.

This credit often comes with shorter than industry standard payment terms so people end up missing payment and being handed over to their in-house collection agency that starts collecting overdue fees.

It's considered digitalized loansharking by many for a good reason.

Ironically it seems that for many smaller e-tailers using Klarna as the payment option seems to heighten the trust of customers so they're more likely to buy (my guess is that we've all been told or told people historically not to enter CC details on random sites and even with stuff like 3D-secure these days everyone is wary)

https://www.theguardian.com/money/2018/nov/17/klarna-buy-now...

It's Payday Loans 2.0.

It's really disturbing to see Klarna as a payment option in many Dutch online shops. These always already have iDEAL (which the vast majority of customers use), a convenient way of doing an electronic bank transfer; and most shops support credit cards too.

Now I think they manage to track your devices so I only have to enter my postal code, and then I just click purchase, and it's all done.

They used to use really weird/dark patterns, to make you forget to pay and then pay huge fees to Klarna.

Nowadays as I've configured Klarna, it just subtracts the amount from my bank account, hassle free, and I don't have to do a bunch of reserach wether or not the website is credible.

Somewhat like Paypal, but smooother.

https://en.wikipedia.org/wiki/Short_Payment_Descriptor

I don't see how credibility of website depends on what payment options they offer. That sounds like a separate issue.

As to why it's popular with consumers looking at https://www.klarna.com/uk/smoooth/ , seems like they're offering months of interest free credit and also the implication is that using Klarna doesn't affect credit score.

It'd be interesting to know how their credit risk setup works.

It may be different in different countries but the thing with the interest free credit is that once you don't pay on time it is converted into a revolving credit with high interest rate and something like a 60 months payment plan.

Klarna have also historically made up own names for fees to circumvent regulations for regulated fees. They were among the first to remove days of grace and among the first to use a fixed number of days from purchase to due date.

Sellers get paid immediately and they take care of making sure the customer pays.

Some banks used to require people to log into their banks to temporarily unlock their card for internet shopping, or, nowadays, one also needs to authenticate the purchase with the bank. That adds extra friction.

With Klarna one does not need to pay until 14 days after the goods are shipped. Credit cards are even better, but most people tend to just have a debit card. With Klarna they don't need to worry about spending too much money from the account and having some other payment bounce later on.

I personally stopped using them after I fell for one of their dark patterns and bought something on credit, which incurred an extra fee. Legally I was entitled to cancel the credit purchase, pay the full amount and avoid the fee; but I was still annoyed.

(Not claiming it's a killer feature, but it's a feature.)

Also, I figure they must be paying a lot of money to be the default payment provider on so many services.

For me, asking for my bank login details is...ridiculous - it'll be interesting to see if it is still following the same tactics in a few years.

Is there more information on this? Are they doing the same thing Plaid does in the US? That is, literally asking for user credentials to internet banking instead of using the banks' proper APIs?

One e-shop I use regularly switched to Klarna and the whole checkout experience got much worse. Simple forms replaced by broken interactive ones, etc. It's still not better than the old UX, even after multiple iterations. I'm more reluctant to enter CC info than before, for what that's worth.

The same can be applied to a credit card though so it's not a strong argument

You can choose to pay at a later date

You can choose to split the payment into installments