Afterpay vs Klarna (2026): Which Buy Now Pay Later Is Better for Ecommerce?

How BNPL works for merchants

Buy Now Pay Later allows shoppers to receive their purchase immediately and pay in instalments over time. The merchant receives the full purchase amount upfront (minus the BNPL fee), while the BNPL provider manages instalment collection and carries the credit risk.

From a merchant perspective, BNPL is a payment method that: - Increases average order value (customers spend more when they don't have to pay it all now) - Improves conversion rates for higher-ticket items - Attracts younger demographics who prefer BNPL over credit cards - Adds a 3–6% fee to the cost of sales versus standard card processing

The primary business case: if offering Afterpay or Klarna increases your AOV by 15% and your conversion rate by 10%, the 2% additional fee versus standard payment processing is well justified.

Merchant fees

Klarna's standard merchant fee (3.29% + $0.30) is generally lower than Afterpay's (4–6%). However, Afterpay negotiates rates based on volume — high-volume merchants can achieve rates closer to Klarna's standard pricing.

Both fees are higher than standard card processing (2.9% + $0.30 via Stripe or Shopify Payments) but the AOV lift typically offsets the difference.

Consumer reach

Klarna is the global BNPL leader: - 150+ million active consumers worldwide - Available in 45+ countries - Particularly strong in Germany, Sweden, UK, and Nordics - Growing US consumer base via app marketing

Afterpay has a smaller but loyal consumer base: - 20+ million active consumers primarily in US, Australia, New Zealand, UK, and Canada - Strongest in Australia and New Zealand (where it originated) - US growth driven by Block/Cash App ecosystem - Instagram and fashion-forward brand positioning

For UK and European markets, Klarna's consumer base is dramatically larger. For Australian and New Zealand markets, Afterpay is the dominant brand. For the US market, both have meaningful presence.

Payment options offered

Klarna's range of payment options is broader. The "Pay in 30 days" option is particularly popular in fashion, where customers want to try before they pay. For stores selling items over $200, Klarna's longer-term financing option enables purchases that Afterpay's 4-instalment structure may not adequately support.

Conversion impact

Both platforms publish case studies showing 20–40% AOV increases and 10–20% conversion rate improvements. These figures are typically self-reported and from optimistic implementations.

Independent research suggests: - BNPL typically increases AOV by 10–30% for fashion, beauty, and home goods categories - Conversion rate improvements are most significant for orders between $50 and $300 - Below $50: minimal BNPL impact (customers don't need payment options for small purchases) - Above $300: Klarna's financing option is meaningfully more effective than Afterpay's 4-instalment limit

Verdict

Afterpay for: Australian/New Zealand stores, fashion-forward DTC brands targeting millennial women, stores where the "4 fortnightly payments" messaging resonates with the target demographic.

Klarna for: European stores, higher-ticket items (where financing options matter), stores wanting a broader range of payment timing options, and the "pay after delivery" use case in fashion.

Both: Many stores offer multiple BNPL options. Offering both Afterpay and Klarna captures consumers who have accounts with one but not the other, and adds minimal integration complexity via Shopify's payment settings.

Frequently Asked Questions

Does offering BNPL increase chargebacks?

No — BNPL providers bear the credit risk and fraud risk. When a customer pays via Afterpay or Klarna, you receive the full payment amount upfront. The BNPL provider handles all instalment collection and absorbs missed payments. Your chargeback risk is from the underlying card network (if a customer disputes through their credit card company), not from BNPL defaults.

How do I add Afterpay or Klarna to Shopify?

Both integrate with Shopify via the payment providers section. Shopify supports Afterpay natively (via Shop Pay Installments). Klarna has a Shopify app. Adding either typically takes 15–30 minutes. Display the BNPL instalment messaging on product pages and at checkout using the providers' widgets to maximise the conversion impact.

Is BNPL available for all product categories?

Both Afterpay and Klarna have prohibited product categories (similar to credit card restrictions): weapons, gambling, adult content, illegal products. Most mainstream ecommerce categories (fashion, beauty, home goods, electronics, sporting goods) are supported. Subscription products have specific rules — check each provider's merchant terms.

Will offering BNPL increase my average order value?

Most stores that add BNPL see some AOV increase, typically 10–25% in fashion and beauty categories. The impact varies by your existing customer demographic, price points, and whether you actively promote the BNPL option throughout the customer journey (product pages, cart, checkout). Passive integration (only showing at checkout) produces lower results than proactive merchandising.

Are there alternatives to Afterpay and Klarna?

Yes. Affirm (strong for higher-ticket items, integrated with Shopify via Shop Pay Installments), Sezzle (smaller US market share, focused on credit-building), PayPal Pay Later (accessible to PayPal's 400M+ user base), and Zip (formerly Quadpay) are the main alternatives in the US. For UK/Europe, Clearpay (Afterpay's UK brand) and PayPal Pay in 3 compete with Klarna.