We all have been in a situation where we have been tempted to order favorite things online but resisted because of the low cash balance (sigh!!). Well, the instant recharge facility through Stripe or GooglePay has eased out the process of purchasing hundreds of things even with low balance. However, Buy now and pay later app development is playing a different ball game altogether. BNPL apps have served these cravings perfectly even with low cash balance, which is why they are high in demand. 

These shop now and pay later applications are becoming the new face of the eCommerce market and help people in making extravagant purchases. 

If we go by the definition, buy now pay later concept helps customers purchase their desired products in installments. Meaning, the users do not have to bear the upfront cost of purchasing and can efficiently manage the installments. Popular apps operating in this segment are Klarna, Afterpay, Affirm, Zebit, Perpay, etc. 

Amongst all of these popular names, Klarna has a great deal to offer. It allows users to pay the shopping price in equal installments. The idea is well accepted in the market, and the industry has benefitted highly during the Covid-19 times. It is expected that Buy Now Pay Later (BNPL) will grow at the rate of 9.8% annually for the coming five years. 

The stunning ascent of these numbers has changed the dynamics of the online market, and more & more entrepreneurs are interested in developing buy now and pay later apps like Klarna. Klarna stands out from other applications and allows users to pay for their purchase in a predetermined number of installments. Also, there is no extra cost that a user has to endure for making a purchase. 

This excitement brings us to a question, Do you want to develop an app like Klarna? Do you wish to know the Klarna business model? If yes, we are ready to move ahead with the relevant information. 

Klarna in brief:

Klarna is a Sweden-based application owned by Klarna bank. It is one of its kind applications helping users to have control over their budget. Shoppers can add products to their carts and have them straight away. The users have to complete the payment for the purchase either in 30 days or in divided installments. 

The registered payment card is used to fulfill the installment amount. As mentioned earlier, the user doesn’t have to bear any extra cost or interest fees for the transactions done using the application.

Klarna application gained immense popularity grabbing Snoop Dogg as one of the investors. It is one of the first companies to enter into this segment and gain humongous success. Klarna is a huge private fintech company in Europe and is able to capture around $460million in funding in the year 2019. This definitely entices you to make an app like Klarna at the earliest.

What are the payment options available for users in Klarna like Mobile app development? 

Klarna or any other buy now pay later application operates with three basic functions. 

  1. Complete the payment after 30 days of shopping
  2. Divide the installments into three to four equal parts and pay later in installments.
  3. If the user purchases a high-cost item, s/he can split the cost into 36 monthly payments. However, in this option, the app may charge interest over the payment.
cost to develop an app like Klarna

What is Klarna’s business model?

Klarna application is useful majorly for two groups, eCommerce merchants and users. Merchants are up over the mobile application for attracting end-users and alluring them to buy products.

Users land upon this application to find fantastic deals and discounts on their favorite products. 

Benefits for the eCommerce merchants:

  • A seamless payment service is set up to facilitate the buy now pay later option.
  • Secured application
  • Chances of increasing conversion.
  • No cost or any risk involved for merchants while doing business. 

Benefits for the users:

  • Allows them to shop freely from the variety of products
  • It gives them a window to pay later after delivery
  • It gives them instant access to credit cards
  • Facilitates users to pay in installments
buy now and pay later applications

How does buy now and pay later applications like Klarna make money?

We hope you are here with pen and paper to note down key takeaways of developing buy now and pay later apps like Klarna. This information will be followed by the next steps of procedures like connecting with an app development company, project discussions, lean canvas model preparation, functional/nonfunctional requirements, document preparation, prototyping, and so on and so forth.

Klarna-type applications have their own ways of making money. 

Firstly, it has a monthly fee ($90) set up or charges a small percentage (1.5 to 3%) of transactions from the merchants. Additionally, if the merchant needs to set up an account, s/he needs to pay $600. If you observe, other popular apps like PayPal and Stripe operate over this revenue model only with a slight difference in the charges. 

Secondly, Klarna is almost free for users who can afford to pay installments in 14 days. Later, if the user misses a deadline, s/he is charged $10 for every missing entry. If the user crosses the deadline of the billing month for a high-cost product, Klarna charges an interest rate of 18.9%. 

What are the benefits of developing buy now & pay later application? 

The whirlwind of shopping amongst millennials especially is quite noticeable. 60% of online shopping in the year 2019 was done by millennials. This new outlook towards shopping is helping businesses earn their share and make money. Few other benefits are:

  • It helps merchants and businesses to offer loyalty and incentive programs to customers. This way, they can churn more customers and earn money.
  • Buy now pay later apps to help small businesses avail of the benefits of credit card shopping. The ones who lost customers for not accepting online payments now have a new way of making customers. 
  • It also helps merchants keep a check on the shopping trend of the users. Using the Klarna app, merchants can know the shopping behavior and offer them targeted discounts and services. 
  • People who usually do not complete their shopping transactions because of low to no money now have a way to shop better. 
features of the buy now pay later application

What are the features of the buy now pay later application?

The following are the requirements and features of buy now pay later app development like Klarna. 

  • Secured transaction.
  • High-performance application
  • Portable application
  • Excellent reward system
  • In-app categorization
  • Budgeting
  • In-app capabilities;
  • Personalized inspiration
  • Easy returns
  • Price drop notification
  • Delivery tracking
  • Increase spending limit
  • Instant shopping confirmation
  • Customer service
cost to develop an app like Klarna

What is the cost to develop an app like Klarna?

In general mobile app development cost in this category is around $15K-$20K. This includes front-end and back-end development both. However, the cost may vary from one on-demand app development company to another depending on their location, or hourly cost, features, functions, third-party API integration, and many more of such factors. 

It is best to select a mobile app development company with whom you can partner and then discuss the project commercials to get a definite price estimate. 

If you ask us, you will find reasonable developers in India over developers from the US or Europe. (just a quick tip if you want to hire us ?)


Applications operating with Buy now pay later concept have increased the shopping power of the customers. BNPL has a huge market, and more and more entrepreneurs want to make a jump into it. If you are interested in entering into this disruptive market but do not have enough resources to implement it, we are happy to help. Our team of domain experts will guide you through the entire mobile app development process and explain each and every logic in detail. Also, if you choose to hire our mobile app developers, they will work together with you as your extended team and contribute to the process. Call us for any more details and queries.

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