What is Klarna for Magento ?

Pick by geography first, then by audience. Klarna is the right default if you sell into Europe, the UK, or the Nordics — it dominates those markets by a wide margin and is increasingly strong in the US. Afterpay (Clearpay in the UK) leans hardest into Pay-in-4 for fashion and beauty under $400, especially in Australia and the US. Affirm leads US-only high-AOV financing (think Peloton, mattresses, electronics over $500) with longer 12 – 36 month terms. If you only enable one, pick by where your top-5 markets are. If you sell globally, run Klarna plus one regional alternate — the Magento module ecosystem supports all three concurrently.

Alongside, every time. Klarna is a BNPL specialist, not a general card processor — it does not handle low-value card payments efficiently and most shoppers still want a plain card option at checkout. The standard production Magento stack runs Stripe (or Braintree / Authorize.Net) for cards and Apple Pay / Google Pay, PayPal for the PayPal-loyal segment, and Klarna for the BNPL upgrade path on AOV $100+ carts. Magento’s checkout supports an arbitrary number of payment methods side by side, and Klarna’s module is built to coexist with the others — the widget only renders when Klarna’s risk engine approves the cart.

The merchant pays. Klarna’s merchant discount rate sits in the <code>3 – 5%</code> band of order value depending on country, volume, and which Klarna products are enabled — Pay-in-3 typically costs the merchant less than Financing because Klarna’s risk window is shorter. That compares to Stripe’s roughly <code>~3%</code> on cards and PayPal’s <code>2.9 – 3.49%</code>. The customer pays nothing extra for Pay-in-3 or Pay-Later-30 (interest-free), and only pays interest on the Financing product. Klarna negotiates rates per merchant — if you process more than ~$1M/year in Klarna volume, ask for a custom rate; the rack rate is for small merchants.

Yes — Klarna is fully PSD2 / SCA compliant out of the box, and that’s actually one of the operational reasons to add Klarna to a European Magento store. Klarna handles the strong-customer-authentication flow internally (typically via banking-app push notification or one-time-passcode) and returns an authenticated session to Magento. The Klarna_Kp module passes the 3DS-equivalent flag through to the Magento order, and the order is exempt from chargeback risk because Klarna assumed the SCA liability. This is the same reason banks accept Klarna-routed payments without extra authentication steps.

Yes — Klarna ships a Hyvä-compatibility bridge as <code>klarna/hyva-checkout</code>, separate from the Luma module. The bridge ports the Klarna Payments widget into Hyvä’s Alpine.js-based checkout, preserves the inline risk-check and on-site-messaging components, and is maintained alongside Magento upgrades. Install with <code>composer require klarna/hyva-checkout</code> on top of the standard <code>klarna/m2-kp</code> module. The on-site-messaging widget for PDP / cart works on Hyvä without additional changes. Klarna_Checkout (the paid hosted-checkout product) also has a Hyvä bridge but the migration path is less clean — if you’re on Hyvä and starting fresh, Klarna Payments is the better fit.

Refunds are wired through Magento’s credit memo flow. When you create a credit memo in the Magento admin against a Klarna-paid order, the Klarna_Kp observer intercepts the save event and calls Klarna’s Refund API with the same amount, marking the refund against the original Klarna order reference. Partial refunds work the same way — refund a single line item via the credit memo, Klarna refunds the matching instalment proportionally. Returns initiated by the customer through Klarna’s own portal also push back into Magento via the webhook controller, which auto-creates the credit memo. The one edge case: custom RMA modules that bypass the standard credit-memo event will skip the Klarna hand-off — always test the RMA flow end-to-end in Klarna’s sandbox before shipping a custom return workflow.