In Europe, strong customer authentication is now required when making credit card purchases https://en.wikipedia.org/wiki/Strong_customer_authentication

So Klarna delays having to authenticate with the bank which issued your credit card from the time of purchase, to the time of paying your Klarna "credit card bill".

They also delay sending your invoice until the item is actually shipped, and you then have a 14 day due date. This means returns and refunds have no money exchanged from any of your own accounts, so you don't have to worry about how long it takes for the refund to enter your credit card.

Edit: They also remember you address based on your email and name, across any vendors, so check out is really quick even if it is the first time you shop at a specific site. This is of course great for smaller vendors.

Klarna in Europe I think for most people I know is a "i made this mistake once" experience. I know nobody who picked the Klarna transaction type more than once.

The checkout is super quick only to be frustrated with the payment process later. And since it's Klarna that comes after you to collect payment it can eventually backfire on the business that you ordered from as well.

What's wrong with the payment process in your country? Where I am it's as easy as paying any invoice I get from a credit card company or I can by with debit card.

Also in my country, in Europe, Klarna is mentioned more and more in news articles about consumer debt and predatory lending, so I think their market share among people who keep credit card balances is increasing. They have stopped or kept pending unusually large purchases by me pending a credit check, but they could probably do a lot more to not get a reputation as lumped together with the most predatory consumer loan banks.

The issue is you order something, your significant other unpacks the thing and disposes the paper which includes the invoice to be paid. Only weeks later you get notified that you did not pay.

Could be different in your country, but here in Norway there wouldn't be an invoice in the box. The whole idea is that payment is totally separate. Email invoice or separate invoice per post, unless you pay immediately when ordering.

The shop you ordered from does not know or care how the transaction is done between you and Klarna.

Quite honestly I don't care enough to give it another try. Credit cards work just fine.

Well, they are all in one payment processor, loan institute and debt collector with terrible record, with some questionable business practices.

They are an elaborate pay day loans company.

Yeah, I would agree with that: it's payday loans with a friendly face. I once worked with someone who had previously been an exec at Klarna, and he had some 'interesting' stories about how they did credit decisioning. One of the examples that always stuck in my mind[0] was declining people with five or more vowels in their last name, because it was an effective proxy for West African people. (I remember that one because it also picks up my somewhat posh double-barrelled English surname, so I suppose I would have been collateral damage.)

[0] I should say I can't remember for sure if this was from his time at Klarna or somewhere else, but it was at least illustrative of the kind of people and the culture there.

Their main selling point is offering high interestrate credit to sites customers and paying the site the money directly, taking the risk.

I believe their value lies in their e-commerce partnerships. You can effectively check out (almost) as seamlessly as a using a credit card on partner sites. I used Klarna when I bought new golf clubs. They show up right on the checkout screen. I can afford to buy them outright but it was an interest free loan for two years so it made logical sense to me.

It's a payment solution like PayPal but with better integration, and less evil.

There are options for paying first after you receive the goods, and this is all handled by klarna so its a huge win for the sellers.

I don't know how they operate in US but in EU-land they have been pretty awesome. Probably 80% of online stores in Scandinavia use them.

It's interesting how the experience of global companies varies across countries. In Germany, it's quite the opposite. Klarna has an abysmal reputation for buyers, while PayPal is seamless, trusted and popular.

On the flip side, they may have been doing something super awesome for the vendors, since it's so widespread that it's used on almost any web site.

I used to work for a competitor to Klarna, and looked fairly closely into how their services work. My understanding is Klarna was originally built on BankId in Sweeden, which is a pervasive gov backed payment id. Since they are working with an established system, the friction is lower for customers there.

I found my experiences more in line with yours, payment is clunky, and seems dubious.

Not my experience with PayPal and I'm very happy that we now have another option.

There’s a convenience factor at play. A lot, if not all, e-commerce sites in Sweden have a nice big fat “pay with Klarna” button and it’s a one click purchase. No filling in addresses, getting your credit card out etc.