Klarna is a popular payment service that allows shoppers to split purchases into interest-free installments or pay after delivery. However, Klarna is not currently available for use by consumers in Canada. So the short answer is no, Klarna cannot be used in Canada at this time.
What is Klarna?
Klarna is a Swedish financial technology company that offers payment services for online shoppers. Founded in 2005, Klarna allows consumers to split purchases into 4 interest-free payments, try products before paying, or pay after delivery. It partners with retailers to provide flexible financing and payment options at checkout.
Some of the key features of Klarna include:
- Pay in 4 – Split purchases into 4 interest-free installments, paid bi-weekly
- Pay in 30 days – Pay after receiving and trying a product, interest-free
- Financing – Longer-term financing for purchases between $50-$2000
- Shop now, pay later – No need to pay at checkout, pay later with 0% APR financing
Klarna is currently available in 19 countries, including the US, UK, Australia, Germany, and Sweden. It has over 147 million global active users and processes over 2 million transactions per day. Some of the major retail partners include H&M, Sephora, Wayfair, Lenovo, and ASOS.
Is Klarna available in Canada?
No, unfortunately Klarna is not available for use by consumers in Canada at this time. While Klarna has expanded to many countries worldwide, it has not yet launched its services in the Canadian market.
Klarna’s website and mobile app are geo-restricted, so those in Canada cannot access or create an account. The Klarna payment option is also not displayed at checkout on retailer sites for customers with Canadian shipping/billing addresses.
So although Klarna is a popular payment method in other countries, Canadian shoppers currently cannot use Klarna to pay in installments or with flexible financing.
Why isn’t Klarna available in Canada?
There are a few possible reasons why Klarna is not yet offered in Canada:
- Regulatory requirements – Launching in a new country requires complying with local regulations and getting required licenses. Klarna may still be working through regulatory requirements to offer services in Canada.
- Competitive landscape – The Canadian payments space already has some major players like PayBright and Affirm. Klarna may be analyzing market competition before launching.
- Market size – With a population of only 38 million, Canada has a smaller market compared to the US and Europe. Klarna may be prioritizing larger markets first.
- Complexities with retailers – Integrating with new retailers and their checkout flows in each country requires technical work. This rollout takes time.
Expanding globally is a significant undertaking for a fintech company like Klarna. While Canada seems like a natural market, regulatory, competitive, and operational factors may be slowing Klarna’s entry for now.
When will Klarna launch in Canada?
Unfortunately, Klarna has not officially announced plans to launch in Canada. The company has not provided a timeline or indicated that a Canadian launch is imminent.
However, there are some signs that Klarna may be exploring the Canadian market:
- Job postings – Klarna has occasionally posted Canada-based job openings, suggesting they are building a local team.
- Partnerships – Klarna has partnered with some retailers that have a large Canadian presence like H&M and Lenovo.
- Website translation – Parts of Klarna’s website have been translated into Canadian French, hinting at preparations for a Canadian rollout.
So while Klarna’s launch in Canada doesn’t seem to be happening immediately, they appear to be laying the groundwork to expand here. It’s possible we could see Klarna become available to Canadian consumers sometime within the next 1-2 years.
Klarna alternatives in Canada
Although Klarna itself is unavailable in Canada currently, there are some similar payment and financing options that Canadians can use:
Service | Key Features |
---|---|
PayBright |
|
Affirm |
|
Afterpay |
|
Sezzle |
|
These “Buy Now, Pay Later” services offer flexible payment options and customer friendly financing to Canadian shoppers. They allow customers to split purchases across multiple installments and in some cases, delay payment entirely until after delivery.
While they may not offer the exact same features as Klarna, these alternatives enable a similar ability to pay flexibly from top Canadian retailers. PayBright and Affirm in particular have broad partnerships with popular merchants such as Walmart, The Bay, Sephora and Lululemon.
The future of “Buy Now, Pay Later” in Canada
“Buy Now, Pay Later” services like Klarna are clearly growing in popularity worldwide, as they enable more flexibility in how consumers pay for purchases.
Adoption of these payment options has been slower in Canada compared to countries like the US or UK. However, we are now seeing major fintech players launching and expanding BNPL services in Canada.
In addition to Affirm, PayBright and Afterpay which are already established here, Klarna and even homegrown companies like PayPlan are rumoured to be preparing launches.
As more retailers integrate flexible payment options into their checkouts, and more consumers get comfortable with splitting purchases across multiple installments, BNPL is likely to gain significant traction in Canada in the coming years.
The launch of a major player like Klarna into the Canadian market could be the tipping point that accelerates adoption. But for now, Canadians will have to rely on the other available BNPL options when shopping online.
The BNPL competitive landscape
Here is a look at some of the key Buy Now, Pay Later players in Canada and their offerings:
Company | Installment Options | APR | Credit Check? | Merchants |
---|---|---|---|---|
PayBright | 2-96 months | 0% | Soft check | Walmart, The Bay, Sephora |
Affirm | 3, 6, 12 months | 0-30% | Soft check | Amazon, Walmart, Expedia |
Afterpay | 4 payments over 6 weeks | 0% | No | Fashion retailers |
Sezzle | 4 payments over 6 weeks | 0% | No | Online boutiques |
This illustrates some of the range in installment plans, interest rates, and retail partnerships across the main existing BNPL providers in Canada.
The risks and drawbacks of BNPL services
While Buy Now, Pay Later services are popular for offering more flexible payment options, there are some potential downsides and risks to be aware of as a consumer:
- Possibility of overspending – The easier payments can lead some users to overspend and take on more debt than they can afford.
- Impact on credit score – In some cases, missed BNPL payments can negatively impact your credit report and score.
- Lack of consumer protections – BNPL services may not always offer the same protections and rights as credit cards.
- Fees or interest – While many plans are 0% interest, some BNPL companies do charge interest or fees.
- Data usage concerns – BNPL services require you to share personal and purchase data, which raises privacy concerns.
Consumers should understand these potential cons before using Buy Now, Pay Later. Setting a budget for purchases and reading terms carefully can help avoid issues.
There are also calls for BNPL firms to be more regulated in Canada to ensure adequate consumer protections. Voluntary industry codes of conduct have been created, but regulation may be needed as the industry grows.
Conclusion
Unfortunately for Canadian shoppers, Klarna is not available for use in Canada at this time. The popular Buy Now, Pay Later service has not yet launched in the Canadian market.
While the reasons are not definitively known, it may come down to regulatory requirements, market dynamics, and complications integrating with Canadian retailers. However, Klarna does appear to be laying the groundwork for a future Canadian expansion.
In the meantime, services like PayBright, Affirm, Afterpay and Sezzle are available as “Klarna alternatives” in Canada. These provide flexible installment payment plans, interest-free financing, and a “pay later” option at many top retailers.
As the Buy Now, Pay Later industry grows worldwide and locally, the launch of Klarna in Canada seems imminent. But until then, Canadians have options to access this popular payment model through other providers.