Boost Your Business with BNPL: Compare Affirm, Afterpay, and Klarna

Boost Your Business with BNPL: Compare Affirm, Afterpay, and Klarna

Table of Contents:

  1. Introduction
  2. Why Offer Buy Now Pay Later (BNPL) Options?
  3. Comparing the Top BNPL Providers: Affirm, Afterpay, and Klarna
  4. Background Information on Affirm, Afterpay, and Klarna
  5. Fees and Terms for Consumers 5.1 Afterpay 5.2 Affirm 5.3 Klarna
  6. Merchant Fees and Terms 6.1 Afterpay 6.2 Affirm 6.3 Klarna
  7. Size and Growth of BNPL Providers 7.1 Afterpay 7.2 Affirm 7.3 Klarna
  8. How BNPL Providers Help in Acquiring New Customers 8.1 Afterpay 8.2 Affirm 8.3 Klarna
  9. Choosing the Right BNPL Provider for Your Business
  10. Conclusion


In today's online retail landscape, offering flexible payment options like Buy Now Pay Later (BNPL) has become increasingly important for attracting new customers and boosting conversion rates. With the rise of BNPL services, such as Affirm, Afterpay, and Klarna, merchants need to carefully consider which provider is the best fit for their business. In this article, we will compare these three popular BNPL providers from a merchant's perspective, taking into account factors like consumer fees and terms, merchant fees and terms, provider size and growth, and how they help businesses acquire new customers.

Why Offer Buy Now Pay Later (BNPL) Options?

Before delving into the comparison, it's important to understand why offering BNPL options is crucial for e-commerce businesses. BNPL services allow customers to make purchases and defer the payment over a set period of time, typically through installment plans. This payment flexibility not only attracts new customers who prefer this option but also increases the likelihood of larger average order values (AOV) and conversions. By offering BNPL, merchants can tap into a growing pool of shoppers who actively seek out this payment method.

Comparing the Top BNPL Providers: Affirm, Afterpay, and Klarna

In this section, we will provide an overview of Affirm, Afterpay, and Klarna, the three leading BNPL providers. Understanding their background, offerings, and market presence will help merchants make an informed decision when choosing the right provider for their business.

Background Information on Affirm, Afterpay, and Klarna

Affirm, founded in 2012 and headquartered in San Francisco, is a fintech company that specializes in providing installment loans for customers at the point of sale. Afterpay, founded in 2014 and based in Sydney, Australia, has become one of the main BNPL apps globally, offering customers the option to split their payments into four equal installments over a six-week period. Klarna, founded in 2005 and originating from Sweden, is a regulated banking company that offers various online financial services, including BNPL options, to customers worldwide.

Fees and Terms for Consumers

To understand the customer experience with these BNPL services, it's important to examine the fees and terms associated with each provider. This information will help merchants evaluate the potential impact on customer acquisition and conversion rates. We will now break down the consumer fees and terms for each of the three providers.


Afterpay allows customers to make purchases and pay for them in four equal installments over a six-week period. The first payment is due at the time of purchase, with no interest fees applied. However, late payment fees may be charged for any payments that cannot be collected, up to 25% of the order's value.


Affirm offers customers the option to spread the cost of their purchase over a fixed period ranging from 3 to 36 months. There are no fees or interest charges, but a simple interest rate of zero to 30% is applied depending on the setup. Affirm is designed to cater to customers who prefer a simple, long-term payment solution, especially for larger purchases.


Klarna allows customers to split any purchase into four automatic, interest-free payments over a two-month period. There are no interest charges, but a fee of up to eight dollars is charged if an automatic payment fails. Klarna is popular among customers looking for short to medium-term help, primarily for smaller orders under one thousand dollars. For larger purchases, Klarna also offers financing options of up to 36 months with multiple payment installations.

Merchant Fees and Terms

In addition to understanding the consumer perspective, it's crucial for merchants to evaluate the fees and terms imposed by each BNPL provider. These factors directly impact the profitability and cash flow of the business. Let's delve into the merchant fees and terms for each provider.


Merchants using Afterpay are charged a 30 cent fee per transaction, in addition to a commission rate fee of four to six percent per transaction, depending on the agreed plan. Afterpay does not pay the merchant until the customer receives the items, ensuring the payment is made in full.


With Affirm, merchants are guaranteed to receive full payment within one to three business days of the purchase. The typical fee charged by Affirm is 5.99% of the transaction amount, along with a 30 cent per transaction fee. However, these fees may vary based on the business type and size.


Klarna charges merchants a monthly product fee, a fixed transaction fee, and a variable percentage fee. The specific fees depend on the country and the chosen payment plan when a customer makes a purchase. Klarna guarantees swift and upfront payments to merchants, regardless of the payment arrangement with the customer.

Size and Growth of BNPL Providers

Understanding the size and growth trajectory of BNPL providers is essential, as it reflects the market reach and potential customer base. Let's take a closer look at the size and growth of Affirm, Afterpay, and Klarna.


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