Is Klarna or PayPal better?

Neither clearly leads. Klarna starts at On request and PayPal at $29/month, and user ratings are close enough to be indistinguishable. Choose on capability and platform support.

Which is cheaper, Klarna or PayPal?

Klarna starts at On request and PayPal at $29/month.

Does Klarna or PayPal run on more platforms?

Klarna runs on Web, iOS, Android. PayPal runs on Web, Ios, Android, Api.

What is Klarna best used for?

Klarna is most often used for a fashion or furniture retailer with average order values high enough that a 3% fee uplift is repaid by a larger basket, a merchant selling to younger shoppers who have low credit card penetration and would otherwise abandon at checkout, a european retailer wanting a single hosted checkout that handles instalments, invoice and card in one flow, a brand that wants distribution inside klarna's shopping app as an acquisition channel rather than only a payment option. Of those, a fashion or furniture retailer with average order values high enough that a 3% fee uplift is repaid by a larger basket and a merchant selling to younger shoppers who have low credit card penetration and would otherwise abandon at checkout are not what PayPal is typically brought in for.

What can Klarna do that PayPal cannot?

Klarna covers Pay in 4, Pay in 30 days, Longer-term financing, Klarna app placement. PayPal covers Payment processing, PayPal Checkout, Invoicing, Business debit card.

E-Commerce · head to head

Klarna vs PayPal

Klarna

E-Commerce

Buy now pay later and instalment checkout for online and in-store merchants

From: On request
Rated: -

Full review Website

PayPal

Personal Finance

The simpler, safer way to pay and get paid

From: $29/month
Rated: -

Full review Website

The short version

Each has a real cost: Klarna merchant fees for the short-term products run around 5.99% plus a fixed fee in the United States, roughly double a standard card rate, so unless Klarna measurably lifts average order value or conversion it is a straight margin loss.; PayPal currency conversion on international purchases and sends carries a 4.00 percent fee, and 3.00 percent in other conversion scenarios
They diverge on capability: Klarna covers Pay in 4, PayPal covers Payment processing.
Prices and features above were last checked on 31 August 2026.

Where they differ

Only the attributes on which Klarna and PayPal actually diverge.

Attributes where Klarna and PayPal differ
Attribute	Klarna	PayPal
Starting price	On request	$29/month
Pricing model	quote	usage-based
Platforms	Web, iOS, Android	Web, Ios, Android, Api
Category	E-Commerce	Personal Finance
Founded	Unknown	1998

Identical on both: free tier (No), user rating (Not yet rated).

What each one covers

Drawn from each product's published feature list. An absence here means we hold no record of it - not that the product lacks it.

Only in Klarna

Pay in 4
Pay in 30 days
Longer-term financing
Klarna app placement
Klarna Checkout
In-store payments
On-site messaging
Merchant portal

Only in PayPal

Payment processing
PayPal Checkout
Invoicing
Business debit card
Working capital loans
Shopify
WooCommerce
BigCommerce

What people use each for

The jobs each tool is most often brought in to do.

Klarna

A fashion or furniture retailer with average order values high enough that a 3% fee uplift is repaid by a larger basketnot PayPal
A merchant selling to younger shoppers who have low credit card penetration and would otherwise abandon at checkoutnot PayPal
A European retailer wanting a single hosted checkout that handles instalments, invoice and card in one flownot PayPal
A brand that wants distribution inside Klarna's shopping app as an acquisition channel rather than only a payment optionnot PayPal

PayPal

Paying online merchants without sharing card detailsnot Klarna
Sending money to friends and family domestically and internationallynot Klarna
Holding balances in multiple currencies for cross border purchasesnot Klarna

Where each one falls short

Documented limitations, not opinions. Every one is a constraint you would hit in normal use.

Klarna

Merchant fees for the short-term products run around 5.99% plus a fixed fee in the United States, roughly double a standard card rate, so unless Klarna measurably lifts average order value or conversion it is a straight margin loss.
Rates are negotiated and unpublished, which means small merchants pay the standard rate while large ones negotiate down, and you cannot benchmark what you are being charged without going to market.
Returns and partial refunds are handled through Klarna's systems rather than your payment processor, so your finance team reconciles a second settlement flow and customer service handles a second dispute process.
Buy now pay later is being brought under consumer credit regulation in the UK, the EU and Australia, which is already changing affordability checks and disclosures; the checkout experience that converts today may be legally required to add friction.
Klarna owns the post-purchase relationship, sending payment reminders and marketing in its own name, so a shopper who has a poor collections experience associates it with your brand while you have no control over the messaging.

PayPal

Currency conversion on international purchases and sends carries a 4.00 percent fee, and 3.00 percent in other conversion scenarios
Instant transfer to a bank or debit card costs 1.75 percent of the amount, with a minimum of 0.25 USD and a maximum of 25.00 USD
International personal transactions carry a 5.00 percent fee regardless of payment method, with a minimum of 0.99 USD and a maximum of 4.99 USD
Sending domestic personal payments funded by a credit card costs 2.90 percent plus a fixed fee of 0.49 USD
Instant transfers are capped at 25,000.00 USD per transaction

Pricing, plan by plan

Klarna

On request

Klarna for Business$undefined/year
- Per-transaction percentage plus a fixed fee, negotiated by merchant
- No published rate card; rates vary by market, product and volume
- Short-term products priced materially above card interchange

PayPal

$29/month

Standard$2.99/transaction
- Card payments
- PayPal checkout
- Invoice payments

Which should you pick?

Choose Klarna if

You need pay in 4.
You work on Web, iOS, Android.
You also want pay in 30 days.

Klarna review

Choose PayPal if

You need payment processing.
You work on Web, Ios, Android, Api.
You also want paypal checkout.

PayPal review

Questions people ask

Is Klarna or PayPal better?: Neither clearly leads. Klarna starts at On request and PayPal at $29/month, and user ratings are close enough to be indistinguishable. Choose on capability and platform support.
Which is cheaper, Klarna or PayPal?: Klarna starts at On request and PayPal at $29/month.
Does Klarna or PayPal run on more platforms?: Klarna runs on Web, iOS, Android. PayPal runs on Web, Ios, Android, Api.
What is Klarna best used for?: Klarna is most often used for a fashion or furniture retailer with average order values high enough that a 3% fee uplift is repaid by a larger basket, a merchant selling to younger shoppers who have low credit card penetration and would otherwise abandon at checkout, a european retailer wanting a single hosted checkout that handles instalments, invoice and card in one flow, a brand that wants distribution inside klarna's shopping app as an acquisition channel rather than only a payment option. Of those, a fashion or furniture retailer with average order values high enough that a 3% fee uplift is repaid by a larger basket and a merchant selling to younger shoppers who have low credit card penetration and would otherwise abandon at checkout are not what PayPal is typically brought in for.
What can Klarna do that PayPal cannot?: Klarna covers Pay in 4, Pay in 30 days, Longer-term financing, Klarna app placement. PayPal covers Payment processing, PayPal Checkout, Invoicing, Business debit card.

Answered from the vendors’ own pages

Klarna: What does Klarna cost a merchant?

Klarna does not publish a rate card. In the United States most merchants pay around 5.99% plus $0.30 for short-term products, with longer-term financing nearer 3.29% plus $0.30, and large merchants negotiate lower.

PayPal: Does PayPal charge fees and when do they apply?

PayPal states that fees apply when converting currency and sending money to accounts in another country. Specific fee amounts are not disclosed on the homepage but are referenced in their published fee schedule.

Source

Klarna: Does the merchant carry the credit risk?

No. Klarna pays the merchant the full amount less fees and takes the risk of the shopper not paying.

PayPal: Is there a subscription cost to use PayPal's basic services?

No subscription fees are mentioned on the homepage. PayPal operates on a transaction-based fee structure for money transfers and payments rather than recurring charges.

Source

Klarna: Can I use Klarna alongside my existing processor?

Yes. It is normally added as an additional payment method through Shopify, Adyen, Stripe or a direct integration rather than replacing your card acquirer.

PayPal: Are there restrictions on when I can use buyer protection?

PayPal offers buyer protection for eligible purchases, but coverage limitations exist. A user agreement sets the specific conditions for protection eligibility.

Source

Klarna: Is Klarna still independent?

Yes. It listed on the New York Stock Exchange in September 2025 and holds a Swedish banking licence.

PayPal: What payment methods can I link to PayPal?

PayPal's digital wallet allows storage of multiple payment methods and can be used for secure money transfers, payment requests, and checkout at major retailers.

Source

Klarna vs PayPal

Klarna

PayPal

The short version

Where they differ

What each one covers

Only in Klarna

Only in PayPal

What people use each for

Klarna

PayPal

Where each one falls short

Klarna

PayPal

Pricing, plan by plan

Klarna

PayPal

Which should you pick?

Choose Klarna if

Choose PayPal if

Questions people ask

Answered from the vendors’ own pages

Related pages

More on Klarna

More on PayPal

Keep looking

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