Before you use Klarna to finance that DoorDash delivery, did you read the fine print?
The popular food delivery app announced its partnership March 20 with commerce platform Klarna in a news release. The goal of the partnership between the two platforms is to give consumers “more ways to pay for groceries, retail, meals and more,” the release reads.
Klarna provides alternative payment schedules, such as pay-in-four and “buy now, pay later” options, to finance everything from cheeseburgers to designer purses.
“Our partnership with DoorDash marks an important milestone in Klarna’s expansion into everyday spending categories. By offering smarter, more flexible payment solutions for groceries, takeout, and retail essentials, we’re making convenience even more accessible for millions of Americans.”
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A spokesperson from Klarna told The Journal News that the company only extends credit “to customers who can afford to repay.”
“Our verification process involves performing a new underwriting decision for every transaction a customer makes. This means we assess a customer’s ability to pay each and every time they want to make a purchase using Klarna,” the spokesperson explained. “This process applies to each of our partnerships, including our partnership with DoorDash.
A recent survey published by CreditCards.com regarding the Klarna partnership with DoorDash erroneously said that most customers utilizing Klarna to purchase from DoorDash had credit card debt. It was found that this survey was inaccurate, and CreditCards.com has unpublished the survey.
The Journal News has reached out to CreditCards.com regarding the survey results, but had not heard back yet as of 12:15 p.m. April 2.
How Klarna for DoorDash works
Customers will see Klarna as a new payment option when checking out from DoorDash, with the following options for payment:
Klarna’s website also lists an option to “split any purchase at DoorDash” using a “secure, instantly created, single-use virtual card.”
Only customers aged 18 or older can use Klarna, and the payment option is only available on DoorDash purchases above $35.
“The primary intention is that consumers will use Klarna Pay in full (immediate payment in full, not credit) to pay for meal deliveries,” A spokesperson for Klarna said. “Pay in full makes up 25% of the payments we process globally. Our interest-free credit product, Pay in 4, is intended to support DoorDash’s expansion beyond meal delivery, moving into higher-ticket deliveries, like Airpods or home goods.”
According to the spokesperson, 25% of DoorDash orders are for non-meal items like electronics, jewelry and home goods — “and the company is looking to grow this side of their business.”
NY Gov. Hochul proposed ‘Buy Now Pay Later’ regulations in 2024
In 2024, New York governor Kathy Hochul introduced proposed regulatory measures for “Buy Now Pay Later” lenders (such as Klarna) in the state budget. The measures would require such companies to obtain a license to operate in the state.
The proposed regulations would also allow for New York to “limit late fees, force companies to report to credit bureaus and implement other fraud protections, much like those already required in the credit card industry,” reporter Jon Campbell wrote for the Gothamist in 2024.
A current version of the proposed regulations exist as Assembly Bill A6757. The bill was referred to the Assembly Banks committee on March 11.
What happens if I miss a Klarna payment?
If you miss a Klarna installment, there are consequences.
“If your payment is not registered by the last reminder due date, the debt is transferred to debt collection,” the Klarna website says. If you can’t pay on time, you do have the option to extend your due date once per the length of that particular order.
“We’ll also try one more time to collect it,” an FAQ page for Klarna reads. “If we can’t collect it a second time, it will be added to your next payment along with a late fee of up to $7. The aggregate sum of your late fees will never exceed 25% of your order value at the time of purchase.”
Klarna’s website explains that the company will email a customer if a payment is unsuccessful.
According to a Klarna spokesperson, all purchases made using the platform are interest-free. But missed payments do incur late fees.
(This story has been updated with new information.)
This article originally appeared on Rockland/Westchester Journal News: The fine print: What you need to know about financing DoorDash orders through Klarna
Reporting by Ashley Catherine Fontones, Rockland/Westchester Journal News / Rockland/Westchester Journal News
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