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    How does Klarna work + 5 reasons why you should use it in your salon or spa

    How does Klarna work

    You can pay for home renovations in installments.

    You can pay for an ASOS clothing order in installments.

    So why can’t you pay for your aesthetic treatments in installments?

    Well, now you can! Klarna is the ideal solution for all beauty salons, meds spas, medi aesthetics, general practitioners, and other beauty and medical businesses.

    Klarna allows clients to pay for services or products in installments while, at the same time, your business gets the entire amount upfront. It’s a win-win, both for you and your clients.

    And you won’t only be doing your clients a “favor” if you decide to set up Klarna. The buy-now-pay-later method will simultaneously bring a lot of benefits to your aesthetics clinic and significantly increase your revenue.

    Let’s find out what it is, how it works, and why you should use Klarna in your salon or spa.

    What is Klarna?

    Klarna is a global corporation that provides buy now, pay later (known as BNPL) services that allow clients to make purchases from online and physical businesses without having to pay the entire amount upfront.

    Klarna is used by 150 million people and 500,000 companies across more than 45 countries.

    Many big brands such as Nike, Valentino, Dolce & Gabbana, Versace, and many others have put their trust in Klarna for their buy now pay later payment options.

    Klarna is basically a replacement for traditional credit cards — only much better, as it eliminates the need for your clients to pay interest on a credit card.

    Customers who use Klarna can either choose to pay for their products or services in four installments every two weeks or pay in full within 30 days, without paying any interest fees.

    Your clinic, though, gets paid upfront and in full, and Klarna takes care of the rest.

    Clients will get what they love when they need it without extra hassle from your side.

    Why use Klarna?

    The rising cost of living has people searching for solutions to afford their basic needs and small luxuries. After paying for necessities such as rent, bills, and groceries, the income you are left with may not be always enough to meet your other needs.

    So, nowadays, the idea of spreading the cost is more attractive than ever.

    And the buy now pay later solution is becoming the new normal.

    BNPL services are experiencing significant growth worldwide, and it’s expected its value to double between 2022 and 2026.

    Klarna is one of the best buy now pay later providers as it offers more financing options among its competitors, cooperates with many famous brands, and can even create virtual card numbers that can be used where Visa is accepted.

    How does Klarna work?

    Using Klarna for your med spa or salon is simple.

    • Registration is not required by your clients
    • The transfer form is conveniently pre-filled
    • The amount is immediately transferred from your client’s account to your business account

    Your customer only has to choose which payment option suits them the best, so you can charge them accordingly. Klarna provides multiple buy-now-pay-later (BNPL) options that don’t require paying any interest or fees. Such options are:

    • Pay in four installments — This option allows your clients to conveniently divide their payment into four installments, paid every two weeks, without incurring any interest or fees for their purchase. It only requires a 25% down payment at the time of purchase, and then three equal payments will be charged from your client every two weeks.
    • Pay in three installments — This option allows clients to divide their purchases into three equal, interest-free monthly payments. The initial payment is processed at the time of purchase, while the next 2 payments are automatically scheduled every 30 days.
    • Pay in full within 30 days — This option provides clients with the flexibility to purchase services without any upfront payment. They can pay the full amount later, but no later than 30 days from the receipt of the service.

    Important: While Klarna doesn’t charge any interest fees on these types of loans, it will charge late fees if your client doesn’t pay their installments on time.

    • Pay in several installments extended from six to 24 months — Klarna also offers payment options with which you can extend the loan from six up to 24 months. This will allow your clients to keep their monthly payments lower, but the only “con” with these payment options is that Klarna may charge interest fees.

    Data your client will need to provide when paying through Klarna

    • Sort code or bank name
    • Account number
    • Online banking details

    Before the transfer is authorized, your client will receive a confirmation code (TAN) by SMS or as a TAN list by their bank.

    5 benefits of using Klarna in your aesthetics clinic

    Why use Klarna in your salon or spa? Well, for one, buy-now-pay-later (BNPL) method of payment is becoming the new normal, and more and more people prefer this method of payment at checkout. Each year, the number of individuals paying in installments continues to grow, and it may be time for your med spa or salon to start using it too.

    While this payment method is beneficial for your clients, your aesthetics clinic will also greatly benefit from it, and here’s how.

    1. Bigger checkouts

    Clients love the convenience of flexible payment options, particularly when dealing with higher payment amounts. Having Klarna available may encourage them to consider more expensive services, book multiple services simultaneously, or opt for packaged or bundled deals.

    In fact, businesses that have integrated the buy now pay later option into their checkout systems, whether online or in-store, have witnessed a significant increase in the average order value (AOV), often experiencing a rise of approximately 45%.

    Simultaneously, you don’t need to worry about receiving the payment on time as you will receive the full payment upfront.

    2. It can increase conversions

    While driving traffic to your online booking page is challenging, convincing visitors to finalize the booking can be even more daunting — especially if the service cost doesn’t align with their budget.

    With buy now pay later option available, there is a higher chance they’ll proceed with booking the services, as it allows them to manage payments through convenient installments which will increase the chance of converting your website visitors into clients.

    It’s even proven with statistics — with the flexibility BNLP provides, 44% of online shoppers decide to complete the purchase they might have otherwise delayed or abandoned.

    3. More bookings in the long run

    Klarna increases clients’ buying power by allowing them to book services that they might not be able to afford upfront.

    With the ability to divide their purchase into several interest-free payments and not needing to pay the entire amount upfront, your clients will be more comfortable and willing to schedule regular appointments with your aesthetics clinic.

    4. Klarna will give you a competitive edge

    Because of the convenience the buy now pay later offers, clients are more likely to choose you over other practices nearby that don’t offer this payment option.

    With the BNPL option, your clients will also be able to book more premium services or undergo full treatments while avoiding credit card debts, which often can end up with having your client pay huge interest fees.

    5. Secure payment system

    Klarna is designed to have both businesses’ and clients’ safety in mind.

    Clients won’t have to share any information about their card details with your clinic, which instills trust in them that their bank information won’t be used for other purposes.

    Your clinic will also be secured, as Klarna can reject transactions, particularly when your clients already have a substantial balance or when the purchase they want to make involves a significant amount of money that your client can’t afford to pay at the moment or in the near future.

    Klarna disadvantages

    The one and practically the only disadvantage of using Klarna is that they charge you for each financed transaction.

    Their pricing depends on the market, but usually, Klarna will charge your business a $0.30 fixed transaction fee and a variable fee spanning between 3.29% and 5.99% of the total amount of the transaction.

    However, all the benefits that Klarna provides simply outweigh this negative, and it’s surely worth having it in your clinic.

    How your clients can start using Klarna?

    If you’re wondering if you should use Klarna in your salon or spa, the good news is that it’s pretty simple to start using. Your clients only have to be eligible to use it:

    • They should have a mobile phone number
    • A valid email address
    • Be at least 18 years old
    • Have billing and shipping address

    After you confirm that your client is eligible to use Klarna, the application process can begin.

    The application process is quite straightforward. The client can apply for Klarna payment at checkout in your clinic or at the online booking checkout.

    They only have to provide basic personal information:

    • Their full name
    • Address
    • Date of birth
    • Social security number

    Following this, Klarna will conduct a soft credit check to evaluate the client’s ability for the service.

    And then follows the approval process. If the client is approved by Klarna, the purchase can be successfully completed.

    Pros of using Klarna — your client’s point of view

    1. They will have increased buying power: This will allow them to book services that otherwise might not be able to afford upfront.
    2. They won’t pay any interest or fees: Unlike traditional credit cards, Klarna won’t charge any additional fees or interest.
    3. Flexible payment options: Your clients will be able to manage their budget effectively as they can choose one of Klarna’s payment options that suits their needs the most.

    Cons of using Klarna — your client’s point of view

    1. Failure to make timely payments can result in additional fees. A $7 late fee may be applied if payments are not made on time. Additionally, if a payment remains outstanding for ten more days, your clients may face an additional $7 fee.
    2. It may impact your client’s credit score if they don’t keep up with payments. While on-time payments won’t impact your client’s credit score, it’s important to note that late payments can have a negative effect. And, if your client has made multiple financing applications through Klarna, it can also potentially lower their credit score.

    What is Klarna Purchase Power and what it means for your clients

    Your client’s Klarna Purchase Power is how much they can spend when using Klarna.

    This limit changes with each transaction and is also determined by the store they are paying to. Their Klarna history also influences their purchase power, including the presence of any current outstanding balance.

    Your client’s purchase power may also vary when switching between stores or changing their payment methods, so it’s important for your clients to check their purchasing power just before making a transaction.

    How your clients can increase their purchasing power?

    Your clients can’t just ask Klarna for a higher purchasing power, but they can follow some guidelines that can help them increase it.

    • They should make sure they make all the payments on time
    • They should pay their balance as fast as they can
    • Not having more than one outstanding balance at a time in Klarna is also a big plus

    What is the highest spending limit on Klarna?

    Typically, the maximum purchase using Pay in 4 is $1,000, while for financed purchases, the cap is set at $10,000.

    Practice management software with Klarna integration

    Using practice management software that has Klarna integration can be a very big plus for your med spa or salon.

    Your clients can choose the treatment they prefer over the treatment they can afford. They can also purchase packaged or bundled deals rather than single services which means they’ll turn into returning clients.

    Also, apart from clients paying via Klarna at your physical location, if the practice management software you use has an online booking system, your clients can also pay via Klarna when they book your services online.

    Please note: Pabau’s integration with Klarna is not currently live. We’re currently working on this feature, with the aim for it to be released in the first half of 2024.

    Pabau is a practice management software specifically designed to meet the needs of aesthetics clinics and as a plus, it has a Klarna integration coming soon. 

    To use Klarna in Pabua, you have to have a Stripe account. When you log in to Stripe, you will be automatically linked to Klarna, as this feature is already enabled for Pabau customers.

    If, for any reason, you choose not to use Klarna, you can easily disable it in the system. 

    Here’s how you can check whether Klarna is enabled in your Pabau account:

    1. Log into Stripe then go to settings on the top right, and choose settings again.
    1. Next, head to payments and choose payment methods, then scroll down to ‘Buy now, pay later’.
    Klarna set up

    3. You should see Klarna in this section. Make sure it’s toggled on or off, depending on your preference.

    Klarna set up Pabau

    It’s as simple as that.

    Final step - tell your clients about Klarna

    When you start using Klarna, ensure your clients are well aware that you have a buy now pay later payment option.

    This is your time to brag!

    Write about it on your webpage, share the news on your social media channels, and include it in the newsletter.

    You can also add a Klarna badge to your website and to the online booking checkout.

    You can retrieve the payment badge for your website on this link.

    Klarna is a huge addition to your salon or spa

    The buy now, pay later model caters to both your aesthetics business and your clients.

    It’s a no-brainer for your clinic because it can boost the client experience (they get more flexible payment options!) while you get paid in full each time.

    By integrating Klarna, you open the door to bigger checkouts, increased bookings, more returning clients, conversion of website visitors into clients, and secure payment options.

    The simplicity of the application process, the absence of interest fees, and the availability of multiple payment options make Klarna an attractive choice for your clients and a great addition to have it in your clinic.

    However, you should keep in mind that Klarna will charge your clinic for each transaction made via Klarna.

    Practice management software with Klarna integration, such as Pabau, enhances the client experience even more, making it easier for them to choose treatments aligned with their preferences rather than their budget.

    What you should do now

    1. Schedule a Demo to see how Pabau can help your team.
    2. Read more clinic management articles in our blog.
    3. If you know someone who’d enjoy this article, share it with them via Facebook, Twitter, LinkedIn, or email.

    See Pabau in action

    Schedule a free demo with one of our team today.

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