You’ll struggle to find many major UK retail websites that don’t offer a buy now, pay later service. By letting customers spread payments across weeks or months, these providers boost conversion rates and help retailers offer a more flexible shopping experience.
Klarna and Laybuy are two of the most popular BNPL choices for UK retailers. They both work with major brands and offer similar services to consumers and merchants.
But which is better?
This article will compare Laybuy vs Klarna on several factors, including offering, customer experience, fees, and more. By the end, you’ll know exactly which BNPL you should integrate into your store.
| Laybuy | Klarna | |
|---|---|---|
| Payment type | instalments | 3 instalments or pay after 30 days |
| Late fees | Yes starting at £6 | No |
| In-store purchases | Yes | Yes |
| Fees | 4%-10% per transaction | Between 1.9% and 2.9% plus a flat rate of 20p |
| Merchant protection | Yes | Yes |
| Cross-border commerce | Yes (US, Aus, NZ) | Yes (over 20 countries) |
| Integrations | Yes | Yes |
| Support | Help centre, merchant dashboard | Help centre, email, live chat, phone |
| Trustpilot score | 4.1 | 4.8 |
Sections
Laybuy vs Klarna: At a Glance
Laybuy is a New Zealand-based buy now, pay later payment provider founded by father and son team Alex and Gary Rohloff. It is currently used by thousands of brands across four markets (New Zealand, Australia, the UK and the U.S.).
Laybuy’s core offering lets customers spread payments over six, interest-free instalments. Purchases can be made online with participating retailers via an app and in-store using a Laybuy card.
Brands like Amazon, Samsung and Boohoo use Laybuy.
Klarna is a Swedish company founded by three students in 2005. It is now one of the learning buy now, pay later providers in the world, operating in 17 countries with tens of millions of customers.
Shoppers can spread the cost of payments in three ways:
- Three instalments paid over 60 days
- The entire amount paid 30 days later
- Long-term financing
UK retailers like H&M, Levi’s and adidas use Klarna to improve the customer experience and boost sales.
What Does the Shopping Experience Look Like for Customers?
One of the major reasons for using a BNPL provider is to improve the consumer experience. That’s why the first thing we’ll compare is how good the shopping experience is with both Laybuy and Klarna.
How do customers spread payments?
Laybuy lets customers spread payments over six weekly interest-free instalments. They can choose to use Laybuy on a merchants checkout page or shop specific retailers through Laybuy’s app.
Laybuy also offers customers a Boost function allowing them to make more expensive purchases with an upfront payment.
Customers can choose to pay using Klarna at a store’s online checkout or using their app or card. Payments can be made in several ways. Consumers can either pay in three interest-free instalments or delay the entire purchase by 30 days.
Klarna also offers a subscription service to merchants, allowing customers to sign up for automatic recurring payments.
Do they charge late fees?
If you care about your customers getting charged for failing to pay, there’s only one choice. Laybuy charges customers late fees, but Klarna does not.
Laybuy may charge customers a £6 late fee if they cannot take payment. Customers will receive a notification immediately when payment collection fails, and the payment will be attempted again 24 hours later. Laybuy will charge a late fee if this fails. An additional late fee will be charged seven days later if the payment fails again.
Klarna promises customers they will never pay interest or late fees on instalment payments or “Pay in 30” payments. Debt collection agencies may be contacted if payments remain outstanding for several months.
Who can be a customer and do they run credit checks?
Laybuy customers must be 18, live in the UK and have a valid email address, telephone number, debit or credit card, and passport or driving licence.
Klarna customers must also be 18 and live in the UK. Klarna also requires customers have a positive credit history. Credit checks may be performed to verify a customer’s financial standing, but these don’t affect credit scores.
Can Customers Use Laybuy or Klarna In-Store?
Both Laybuy and Klarna can both be used in physical retail stores.
Laybuy gives UK customers a virtual card that can be used in conjunction with their Apple or Google Pay wallets.
Klarna offers two solutions: a physical card and a payment link. The physical payment card can be used everywhere Visa is accepted. The payment link solution integrates with merchants’ POS systems. Retailers send customers a payment link via email SMS or QR code, and the purchase can be completed on their phone.
How Much Do Laybuy and Klarna Charge Merchants?
Neither Laybuy nor Klarna states merchant fees openly on their websites. Thanks to our digging, however, we’ve been able to get an idea of the typical rates they charge merchants. Make sure to contact each respective merchant for confirmation of their fees.
Laybuy charges merchants between 4% and 10% per transaction
Klarna is cheaper, charging between 1.9% and 2.9%, plus a flat rate of 20p per transaction.
Both providers may also charge additional setup fees.
How Much Protection do Laybuy and Klarna Provide?
The added payment protection BNPL providers provide merchants is one of their biggest selling points. Both Laybuy and Klarna take steps to minimise risks for merchants.
One of the best things about using buy now, pay later providers is the additional payment protection they provide to retailers. Both Clearpay and Klarna take steps to minimise the risk of missed payments.
Laybuy pays merchants instantly and assumes all credit and fraud risks.
Klarna provides fraud and chargeback protection if retailers comply with the company’s Shipping Policy. Klarna also performs identity and credit checks on customers to reduce risk to themselves.
Can Laybuy or Klarna Help You Sell Abroad?
Both Laybuy and Klarna help your store to sell internationally.
Laybuy operates in the U.S., Australia and New Zealand and facilitates purchases from any of these companies.
Klarna facilitates international sales in significantly more markets. Klarna currently operates in over 20 international markets, and lets merchants sell in all of them.
What Platforms and Payment Processors Do They Integrate With?
There’s no point choosing Laybuy or Klarna if they don’t integrate with your existing eCommerce platform or payment gateway. Luckily, both providers integrate with the vast majority of platforms and gateways.
Laybuy has partnered with most major e-commerce platforms to make integration easy. This includes Shopify, BigCommerce and WooCommerce. Find a full list of integrations here.
Klarna also integrates with most major e-commerce platforms, including Shopify, BigCommerce and Magento. A full list of integrations can be found here.
Support: What Customer Support Is Available?
Both BNPL solutions offer great support for merchants, but Klarna edges it.
Laybuy gives every merchant access to a dashboard to help them understand their account and grow their business. There is also a comprehensive merchant online support centre. There is no phone support, however.
Klarna provides chat, email and phone support to merchants between 8.00 and 17.00 Monday to Friday, 10.00 to 18.00 on Saturday and 10.00 to 16.00 on Sunday. There is also a substantial online support resource and FAQ.
Reviews: How Are Clearpay and Klarna Rated?
Both brands receive great reviews on Trustpilot.
Laybuy is rated 4.0/5 from over 6000 reviews.
Klarna is rated 4.5/5 from over 20,000 reviews.
Summing It Up
In a head-to-head comparison, Klarna is the better choice than Laybuy.
It has a much more established presence in the UK for one, but it also offers better fees, better cross-border capabilities and better support.
Of course, if you don’t want to miss out on Laybuy customers, why not integrate both? Plenty of stores offer customers one or more BNPL solutions. What’s stopping you?