Founded in 2005 in Stockholm, Klarna is a leading fintech company that provides payment management solutions. So far, the company has processed over 2,500,000 payment transactions, collaborated with over 500,000 international merchants, and has over 85 million active consumers.
Although Klarna’s financial management and payment solutions suit companies of various industries and sizes, some activities are strictly prohibited and businesses that engage in them are not allowed to use Klarna.
In this article, we’ll explore what businesses are not allowed to use Klarna and why. After that, we’ll help you find the most straightforward solutions for what to do after being temporarily or permanently banned by the company.
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What Businesses Are Not Allowed To Use Klarna & Why
According to Klarna’s terms and conditions and terms of service, high-risk businesses and activities offering items and services that are forbidden, restricted, or located in a prohibited region will be temporarily or permanently banned from using Klarna’s tools and features.
Klarna requires its business subscribers to comply with both their terms and conditions and local legislation in the countries where they operate and serve customers. This includes full compliance with local laws and consumer protection policies, age restrictions, product limitations, and payment method requirements.
Klarna reserves the right to determine which businesses, industries, products, or services are prohibited from using their platform. They assess each subscribing business based on the following:
- Compliance with domestic or international legal and regulatory requirements
- Third-party (additional) restrictions on the business activities
- Risk tolerance
- Market-specific necessities
Now that we’ve covered the basics, let’s learn which businesses are prohibited from using Klarna’s services.
Prohibited Types of Businesses
This list is subject to change, so checking regularly for updates is advisable to ensure compliance.
Misuse of Klarna’s platform: Businesses that use Klarna to promote racism or any type of discrimination based on violence, hate, gender, ethnicity, religion, or race; selling or producing services and items that can cause significant danger, harm, and injury to third-parties, including persons and animals; sale of plants, items, or animals that are legally protected domestically and internationally.
Adult services: Prostitution-related services, escort agencies, adult massage services, selling or producing sex toys, items, or services that are in any way related to unlawful sexual acts, such as pedophilia, non-consensual engagement in sexual acts, mutilation, incest, zoophilia, etc.
Unlawful and deceptive marketing campaigns: Illegal and misleading third-party marketing campaigns that can severely damage Klarna’s reputation; illicit pyramid campaigns and schemes, such as Ponzi.
Illicit drugs: Any type of illegal narcotics or similar narcotic-like substances, drug substitutes that resemble illicit drugs, equipment for drug production, etc.
Multiple legal and monetary services: Monetary services by financial or legal consultants who do not have legal approval nor licence to practice such work; tax evasion consultancy, high-level securities; services that offer share dealing, etc.
Illicit gambling: Online gambling and any related activities, such as lotteries or illegal betting, without obtaining the necessary license in advance.
Illegally obtained items or services: Illicitly obtained items that are in violation of any domestic or international law that’s relevant to the subscribing business.
Intellectual property infringement: Businesses that illegally infringe any type of intellectual property laws, including patent, copyright, and trademark laws; uploading, streaming, sharing, redistributing, or reproducing any kind of digital files without obtaining authorisation.
Additional illegal practices: Modern-day slavery, practices that lead to depriving an individual of their liberty, human or wildlife (animal) trafficking, corruptive services, etc.
Tobacco and alcohol: Illegally selling alcohol, tobacco, cigarette substitutes such as e-cigarettes, vapes, and additional tobacco equipment and accessories to individuals without obtaining necessary licenses in the country where the business is registered.
Sanction items: Selling items and services whose origin is from any of the prohibited regions and countries, including, but not limited to, accommodation arrangements and travel reservations to the countries and areas prohibited by Klarna.
Prohibited Regions (Areas) and Jurisdictions
Klarna’s services are not available for businesses registered or operating in the jurisdictions listed below.
Additionally, the company cannot process incoming or outgoing payments for the sale of goods or services shipped from or purchased by consumers with a billing or shipping address in any of the countries and regions on this list.
The list can change at any time, so it’s important to check occasionally to see if you’re still compliant with Klarna’s terms and conditions.
Here are the countries and regions where you are not allowed to use Klarna:
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Additional Restricted Activities
In addition to the prohibited businesses, there are restricted types of businesses, i.e. business activities (selling or producing specific goods and services) that you cannot engage in while using Klarna.
Keep in mind, though, that the list can be modified and more business activities added at any time. The company reserves the right to make any necessary changes at any time.
Here’s the list of additional restricted businesses and business activities:
- Selling of items that are restricted for a specific age
- Bankruptcy consultancy, bailiffs, management of debts and debt collection
- Initial payment (deposit)
- Financial or investment consultancy
- Online or in-person insurance providers
- CBD (cannabis) production or selling
- Selling antiquities and specific types of arts
- Selling or mining cryptocurrency or similar assets
- Cash transfer, exchange of any foreign currencies, tokens, and similar money services
- Auctions
- Pawn stores
- Narcotics paraphernalia and additional equipment for narcotics production
- Pharmaceuticals that require prescriptions
- Multi-layered marketing schemes, such as pyramid or Ponzi schemes
- Medical services
- Gift cards or credit vouchers
- eCommerce marketplaces
- Accommodation booking, as well as airlines or boat lines
- Agencies and companies that organise tours
- Weapon and weapon accessories, explosives, firearms, etc.
- Replicas of guns and similar weapon accessories
- Eyewear that requires a prescription from a doctor
- Prepaid cards for cell phones
- Testing laboratories
- Charities
- Illegal streaming and downloading of photos, videos, audio, and other files
- Activities related to political parties
- Pawn stores
- Narcotics paraphernalia and additional equipment for narcotics production
- Pharmaceuticals that require prescriptions
- Multi-layered marketing schemes, such as pyramid or Ponzi schemes
- Medical services
- Gift cards or credit vouchers
- eCommerce marketplaces
- Accommodation booking, as well as airlines or boat lines
- Agencies and companies that organise tours
- Weapon and weapon accessories, explosives, firearms, etc.
- Replicas of guns and similar weapon accessories
- Eyewear that requires a prescription from a doctor
- Prepaid cards for cell phones
- Testing laboratories
Merchant subscribers accept the terms and conditions when subscribing to Klarna and confirm that they will not engage in risky activities that can potentially harm third-party debit or credit card issuers.
If a card issuing company sends a notice to the company that one of their subscribers has tried to or breached the terms and conditions, Klarna can close the merchant’s account after sending them a 14-day notice. The notice period is short to help the company prevent paying damages to the card issuing company.
What to Do If Klarna Incorrectly Terminates Your Account
Klarna typically provides a 14-day notice before permanently terminating an account with sufficient evidence. However, in some specific cases, the company first needs to assess and monitor the merchant’s account to determine whether they’re misusing its tools before terminating their account.
Sometimes, Klarna might mistakenly ban one of its subscribers from using its services or reject a business from becoming a new subscriber because it’s perceived as high-risk.
If you believe Klarna has wrongly terminated your account or have any further questions about the ban and wish to clarify the situation, contact Klarna’s customer support and schedule an appointment.
To talk to a customer support representative, you’ll need to log in to your account.
If Klarna’s response does not satisfy your concerns and you wish to escalate the matter, you can file a complaint with the Information Commissioner’s Office, also known as the ICO. However, we suggest that you consult a legal expert beforehand if you want to file a complaint.
Finally, keep in mind that to continue using Klarna’s services, you must continuously comply with its Terms and Conditions and the rest of the company’s rules and guidelines.