Klarna vs Clearpay

Klarna and Clearpay are two of the main short-term buy now pay later providers in the UK, offering payment after 30 days or over three or four months¹. Both let you split a purchase into instalments without interest if you pay on time, and both run a soft credit search when you apply rather than a hard one².

The practical differences are in the plan structure, the late fees and what happens when something goes wrong. Klarna's Pay in 3 splits a purchase into three interest-free instalments paid every 30 days, and Pay in 30 days lets you buy now and pay later with no down payment⁴. Clearpay spreads the cost over four repayments, taken at purchase and then every two weeks, with the last payment six weeks after purchase⁶.

On late fees, Klarna adds £5 for any payment made more than seven days after the due date, capped at two late fees per order¹. Clearpay adds £6 for each late instalment and a further £6 if the payment is still outstanding seven days later, with charges capped based on how much you have borrowed¹.

What Klarna and Clearpay each offer

Klarna and Clearpay are two of the UK's main three buy now pay later firms, alongside PayPal⁹. They are not identical businesses. Klarna offers both regulated lending products and unregulated buy now pay later products, while Clearpay focuses solely on unregulated buy now pay later¹⁰.

In the UK, Klarna also provides regulated credit through its Klarna Financing and Klarna Credit Card¹¹. It has a Klarna balance, a digital wallet that lets customers store e-money, add or withdraw funds, and earn cashback on certain Klarna purchases, and a Klarna Card that offers debit and credit options plus cashback for members¹¹. Klarna's Pay in full option lets you pay the entire purchase amount immediately at checkout using your debit or credit card, or directly from your bank account¹².

Clearpay's model is narrower. It spreads the cost of a purchase over four repayments and now includes additional customer protections under new UK buy now pay later regulations¹³. Clearpay also offers a payment arrangement feature for customers who need to adjust their schedule, which asks a few questions about income and expenses and automatically generates a payment plan based on the customer's financial situation¹⁴.

Both are offered at the checkout by many retailers, and you may see an option to spread your payments with schemes like Klarna, Clearpay and Laybuy³. Klarna and Clearpay are two of the main short-term providers that offer this payment option¹.

Pay in instalments: how each plan works

Klarna's Pay in 3 splits your purchase into three interest-free instalments paid every 30 days⁴. Klarna's Pay in 30 days allows you to buy now and pay later with no down payment, and there are no fees when you pay on time⁵. Klarna's Pay later option asks that you make the full payment 14 or 30 days after shopping, depending on the retailer¹⁵. Repayment instalments are managed directly in the Klarna app¹⁶.

Clearpay's plan is four repayments: at purchase, then every two weeks, with the last payment six weeks after purchase⁶. If you want to clear your balance early, you can log on to your Clearpay app, click on the 'My Clearpay' tab, then click on the black 'Pay all' button¹⁷. That feature is only available on the Clearpay app¹⁷.

Both are interest-free credit at the checkout, allowing you to spread the cost of a purchase over a series of repayments¹⁸. One shopper quoted in Consumer Council research described using Clearpay and Klarna to pay off in instalments without interest, as long as payments are made on time¹⁹.

Late fees and charges compared

The cost of missing a payment is where the two providers diverge most clearly. Klarna adds a £5 late payment fee for any payment made more than seven days after the due date, though this is capped at two late payment fees per order¹. Klarna's Pay in 3 adds a late fee if payment is not collected up to 14 days after an instalment is due, with a maximum of one late fee per unpaid instalment and no late fee if less than £1 is left to pay⁴.

Clearpay adds a late repayment fee of £6 for each late instalment and a further £6 if the payment is still outstanding seven days later, with charges capped based on how much you have borrowed¹. Late payments to Clearpay are penalised with extra fees¹⁵.

Klarna no longer charges late fees for missed repayments on its regulated Financing product, which some retailers offer for higher-value purchases²⁰. Klarna also introduced new wording for retailers to use at the checkout, which it says will make it absolutely clear that buy now pay later options are credit products with consequences for missed payments²⁰.

Who can use Klarna or Clearpay

Clearpay accepts Apple Pay, Visa and Mastercard debit or credit cards, but not American Express¹⁷. Klarna accepts most credit and debit cards, and will inform you at checkout if your card has not been accepted¹².

The two providers take different approaches to eligibility checks. Clearpay says it performs soft credit checks for new customers². Others, such as Clearpay, do not run any checks at all and instead start by giving you a low limit which increases if you make repayments². Klarna uses soft searches with credit reference agencies, which do not affect your credit rating²⁰. In addition to robust checks Klarna performs on every purchase, shoppers can share their income and spending data from their bank accounts to confirm they can afford future repayments²⁰.

Clearpay's payment arrangement feature asks a few questions about income and expenses and automatically generates a payment plan based on the customer's financial situation¹⁴. To apply on the Clearpay website, you click 'Help', then 'Financial Support', click 'Continue', answer questions about monthly income and expenses, confirm the information is true, accurate and complete, and if eligible choose a start date, preferred frequency and repayment amount using the slider bar, then click 'Submit'¹⁴.

Credit checks and your credit file

Most of the big providers, such as Klarna, PayPal and Zilch, only run soft credit checks². Clearpay says it performs soft credit checks for new customers². A soft credit search will not affect your credit score²².

Klarna started reporting to Experian and TransUnion in June 2022²⁴. That means existing, late and unpaid balances can be visible on your credit file³. Klarna started reporting buy now pay later borrowing to credit reference agencies in June, in a bid to improve the visibility of shopping debt².

Clearpay users' credit scores will not be impacted if they miss a repayment²⁵. Klarna's Pay in 3 and Pay in 30 products do not report missed repayments to credit reference agencies in a way that affects your score²⁵. Some buy now pay later providers, including Klarna and Clearpay, do not leave any trace of your interest-free borrowing on your credit report, while others such as Laybuy and OpenPay do²⁶.

You can check your credit file for free. ClearScore and Credit Karma are two providers that let you see your credit file for free²⁷. ClearScore is an Equifax partner and is a free for life service²⁸.

Where you can use each one: shops and apps

Klarna and Clearpay are both available at the checkout of many UK retailers. Klarna and Clearpay are two of the main short-term buy now pay later providers that offer payment after 30 days or over three or four months¹. You may see a single Klarna button at the checkout alongside the other payment methods offered by the retailer, with the scheme choice made after selecting Klarna²⁰.

Clearpay's in-store payments work through a digital wallet. You can tap to pay with Apple Pay, Google Pay or Samsung Pay using the Clearpay Card¹³. The Clearpay app is rated on the App Store and Google Play, and the Klarna app is rated 4.9 on the App Store and 4.8 on Google Play²⁹.

Klarna's Pay Now option was rolled out to the majority of UK retailers in 2022, allowing customers to pay immediately and in full wherever Klarna is available²⁰. Klarna's Pay in full option lets you pay the entire purchase amount immediately at checkout using your debit or credit card, or directly from your bank account¹².

Buy now pay later regulation: what protection you get

Buy now pay later has been largely unregulated, but that is changing. From 15 July 2026, interest-free buy now pay later products will be subject to a new regulatory regime overseen by the Financial Conduct Authority⁸. Buy now pay later borrowers will benefit from stronger protections from 15 July 2026, the government has announced⁸.

The new rules bring buy now pay later closer to credit cards, which are covered under the Consumer Credit Act³⁰. Buy now pay later users will benefit from strong rights, such as those under section 75 of the Consumer Credit Act, making it easier to obtain refunds for issues like faulty goods³¹. When buying a single item costing between £100 and £30,000 on or after 15 July 2026 using a buy now pay later provider, you are protected under Section 75 of the Consumer Credit Act 1974, and your buy now pay later provider is jointly liable in cases of faulty goods, non-delivery or if the retailer goes out of business¹⁹.

The government consulted on draft legislation to bring buy now pay later into Financial Conduct Authority regulation³². The plans aim to ensure people using buy now pay later products receive clear information, avoid unaffordable borrowing, and have strong rights when issues arise³³. The consultation closed on 13 February 2023³².

When repayments go wrong and where to get help

If you are struggling to repay, both providers have processes for reporting financial difficulties. With Klarna, you select an unpaid purchase and choose 'Report a problem', then describe your financial difficulties in the text box and click on 'Continue'¹⁶. With Clearpay, you can set up a payment arrangement through the app or website¹⁴.

Missed payments can affect your ability to use Klarna²⁰. If you default, Klarna can charge the outstanding balance on any card it has for you¹⁵. Klarna gives you up to 14 days to clear the arrears after a missed payment⁶.

On complaints, Klarna is regulated as an electronic money institution, so customers can take complaints about their Klarna balance or debit card functionality to the Financial Ombudsman Service¹¹. For deferred payment credit agreements, if you are unhappy with the lender's response, you can make a complaint to the Financial Ombudsman Service³⁵. Complaining directly to the ombudsman is straightforward and free³³. Klarna has also introduced its own complaints adjudicator for customers who are not happy with how their complaints are handled²⁰.

The Financial Ombudsman Service can consider complaints from microenterprises and SMEs as well as consumers³⁶. You will need to make a formal complaint to the business first, and if they do not reply or you are not happy with their final response, you can take it further³⁷.

If you are in financial difficulty, free and impartial help is available. StepChange offers debt advice, and National Debtline provides guidance on buy now pay later¹. The Money Advice Service and Citizens Advice also provide free support. If you are struggling with multiple debts, a debt advice charity can help you work out your options.