Fees, tax handling, payouts and coverage side by side, plus how many verified RevMRR startups use each.
The short version
Neither is a merchant of record, so with either one you register for and remit sales tax and VAT yourself.
On the standard published rate, Affirm (0%) is cheaper per transaction than Klarna (5.99%).
Pick Affirm for: merchants selling considered, higher-ticket items where the payment is the objection — furniture, mattresses, electronics, fitness equipment, jewellery, travel, elective medical and dental, home improvement, musical instruments, powersports. It also works for merchants with a young or thin-file customer base who are being declined or self-declining on cards, and for anyone whose abandoned-cart data shows price shock rather than intent failure..
Pick Klarna for: retailers with considered, higher-ticket purchases — furniture, electronics, travel, fitness equipment, specialty apparel — where basket abandonment is driven by price shock rather than intent, and where a 40% lift in average order value would more than cover the fee. Also for brands that want distribution inside Klarna's own shopping app and ad network rather than just a checkout button..
Founded in 2012, based in San Francisco, California, United States
Founded in 2005, based in Stockholm, Sweden; parent Klarna Group plc is registered in London, United Kingdom
Payment methods
Buy Now Pay Later, Instalments, Cards
Buy Now Pay Later, Instalments, Cards
Best for
Merchants selling considered, higher-ticket items where the payment is the objection — furniture, mattresses, electronics, fitness equipment, jewellery, travel, elective medical and dental, home improvement, musical instruments, powersports. It also works for merchants with a young or thin-file customer base who are being declined or self-declining on cards, and for anyone whose abandoned-cart data shows price shock rather than intent failure.
Retailers with considered, higher-ticket purchases — furniture, electronics, travel, fitness equipment, specialty apparel — where basket abandonment is driven by price shock rather than intent, and where a 40% lift in average order value would more than cover the fee. Also for brands that want distribution inside Klarna's own shopping app and ad network rather than just a checkout button.
Used on RevMRR
Not connectable yet
Not connectable yet
Affirm
Affirm is the most established BNPL provider in the US market and the one with the clearest merchant proposition: you get paid up front, you do not carry the consumer credit risk, and you do not carry fraud risk on approved transactions. That is a genuinely different bargain from card acceptance and for high-ticket categories it demonstrably lifts conversion. The grade is B- because the cost is large and unpublished, the promotional 0% APR products that convert best are the expensive ones, and the consumer-facing service record is poor enough that a share of the complaints will land on your support team rather than Affirm's.
+ You are paid up front and Affirm carries the consumer credit risk. If the shopper stops paying, that is Affirm's loss, not a receivable on your books.
+ Affirm bears the risk of consumer fraud on transactions it approves and states it generally has no recourse to the merchant for it. That is a materially better fraud position than card acceptance, where friendly fraud lands on the merchant.
+ Enormous distribution: approximately 571,000 active merchants and 27.8 million active consumers as of 30 June 2026, with 7.0 transactions per active consumer. Affirm is a demand channel, not only a payment method.
+ $$50.2 billion of gross merchandise volume in FY2026, up 37% year on year, on total revenue of $4.26 billion, up 32%. Affirm also turned its first full year of operating profit — $417 million, against an $87 million operating loss in FY2025.
+ The consumer terms are unusually clean for the category: simple interest only, no deferred interest, no compounding and no late fees, with APRs disclosed between 0% and 36%. That is why Affirm has weathered BNPL regulatory scrutiny better than most of its peers.
+ Adaptive Checkout presents short-term and monthly options together rather than making the merchant pick one, which lifts approval rates on a mixed basket.
– No published merchant pricing whatsoever. Affirm states it negotiates terms with each merchant individually, so you cannot benchmark a quote before entering a sales process.
– The cost is high in absolute terms. Third-party surveys of merchants in the $1-10 million revenue band report per-transaction fees between roughly 4.3% and 8%, with a median around 6% — several times a card rate.
– The best-converting product is the most expensive one. Affirm states it generally earns larger merchant fees on 0% APR financing, so the promotional offer that shifts high-ticket inventory is exactly the one that costs you most.
– A 1.7-star Trustpilot across roughly 7,700 reviews. The complaints are consumer complaints, but the consumer is your customer, and the ones about refunds and APR surprise generate support load on your side.
– APR expectation gaps are a recurring theme: borrowers reporting rates in the high twenties and low thirties on the interest-bearing product despite self-reported good credit. That is disclosed and legal, and it is still a source of post-purchase resentment attached to your brand.
– Kusnier v. Affirm Holdings, a securities class action in the Northern District of California, was dismissed with prejudice on 30 September 2025 but is on appeal to the Ninth Circuit with briefing complete. Three related shareholder derivative actions against Affirm's officers and directors remain on file.
Klarna is the most widely deployed buy-now-pay-later option in the world and, at 1.21 million merchants as of the second quarter of 2026 and $149-151 billion of volume guided for the year, it is not a bet on an unproven company. The question is never whether Klarna works — it is whether the incremental sales are worth a fee that third-party reporting consistently puts around 5.99% plus $0.30 in the United States, roughly double a typical card cost. On high-consideration baskets that answer is often yes. On thin-margin everyday goods it very often is not, and Klarna will not tell you your rate until you are in the onboarding funnel.
+ Genuine, audited scale: Klarna's full year 2025 results report $127.9 billion of GMV, $3.5 billion of revenue, 118 million active consumers and 966,000 merchants — this is not a startup you are betting on.
+ Klarna is a licensed bank and carries the consumer credit risk itself, so the merchant is paid in full up front on an approved order rather than waiting on the shopper's instalments.
+ The demand channel is real and hard to replicate: Klarna's own shopping app and ad network put a merchant in front of a very large logged-in audience, which is a different proposition from simply adding a button.
+ Public company reporting. Since the September 2025 NYSE listing, revenue, credit losses and merchant counts are filed quarterly — a level of financial visibility almost no other provider in this category offers.
+ Easy to switch on and off. Klarna is enabled as a payment method inside an existing checkout rather than replacing the merchant account, so trialling it does not mean re-platforming.
+ Klarna's own marketing cites a 40% increase in average order value and a 20% increase in conversion for brands using its products — vendor figures, but directionally consistent with why merchants keep it enabled despite the cost.
Fees are each provider's standard published rate for a domestic online card payment and can change. Confirm on the provider's pricing page before deciding.
– No published US rate card. Klarna's documentation describes the fee mechanics — a per-capture fixed fee plus a percentage — but not the numbers, which appear only in the merchant portal after onboarding.
– It is expensive. Third-party reporting consistently puts the standard US pay-later rate near 5.99% plus $0.30, which is roughly double a typical blended card cost and is punishing on small baskets.
– Disputes run on Klarna's rules, not the card networks'. Merchants face a three-stage escalation with short response windows, and third-party specialists report a non-refundable per-case dispute fee charged win or lose.
– Merchant protection is uneven. Reporting on the programme indicates strong cover for 'goods not received' claims with strict proof-of-delivery requirements, and much weaker cover for 'faulty' or 'not as described' disputes.
– A securities class action was filed in December 2025 over Klarna's September 2025 IPO, alleging the registration statement understated the risk that credit loss provisions would rise sharply within months of listing. It is unresolved.
– Consumer-side service problems land on the merchant. The BBB file is dominated by refunds credited to a Klarna balance rather than the original payment method, and Klarna's chief executive conceded to Bloomberg in May 2025 that the company's AI-only customer service push had gone too far on quality, and Klarna began recruiting human agents again.
