Buy now pay later platform Klarna headed for New Zealand

Stockholm-based buy now pay later platform Klarna is coming to New Zealand. Photo / Klarna

Riding on fresh US$300 million ($462.7m) investment from ASB owners the Commonwealth Bank of Australia, Swedish payments and credit provider Klarna is launching across the Tasman, competing head on with Afterpay that offers a similar service.

After the Australian launch with CBA, the company looks set to be coming to New Zealand soon.

"Klarna will share news on New Zealand over the coming months," a spokesperson for the company told the Herald without elaborating on the exact arrival date.

The Stockholm-based company is valued at US$5.5 billion and claims to have more than 190,000 retailers on board, including brands like Asos, TopShop and Abercrombie and Fitch.

Apart from Sweden and Australia, Klarna operates in the United Kingdom, the United States, the European Union and Switzerland.

The buy now, pay later (BNPL) provider lets customers shop online and pay for goods in four instalments, by creating a virtual "Ghost Card" in the Klarna app.

Ghost Cards are single use, and unique to each purchase. Klarna aims to replace website checkouts - requiring customers to shop with credit cards that have high annual interest rates - with its BNPL platform.

Klarna's chief executive Sebastian Siemiatkowski. Photo / Klarna

There are no annual fees, and customers can get easy refunds for orders within 14 days. Klarna also offer.

Late payments by Klarna customers in the United States incur a US$10 fee, but this might not be the case in Australia and New Zealand.

"There is currently no interest or fees for Australian consumers," Klarna's spokesperson said.

Retailers are paid upfront and in full by Klarna, and both they and customers get payment protection.

Merchant fees for Australian retailers vary, and Klarna declined to disclose them.

In the United States, Klarna charges retailers monthly product fees of US$30, and US$0.30 per transaction. Interest charged varies from up to 3.29 per cent to 3.79 per cent, depending on service offering.