Is Klarna’s “buy now, pay later” product effectively consumer credit?
Earlier this year, Klarna lost two cases before Dutch financial complaints institute Kifid (Klachteninstituut financiële dienstverlening): https://lnkd.in/dJs-eVHn The key question: Is Klarna’s “buy now, pay later” product effectively consumer credit?In those earlier cases, Kifid said YES.
Now, it has reached a very different conclusion.
A consumer made thirty purchases at a webshop over a one-month period using the pay-later option (Buy Now Pay Later) via Klarna. The consumer was able to make purchases totaling nearly 9,000 euros before Klarna blocked the credit. The consumer complains to Kifid that Klarna should have intervened sooner to prevent irresponsible borrowing.
„Klarna has clarified and substantiated with documents that the pay-later credit in this case is exempt from the Financial Supervision Act (Wft, Article 1:20, paragraph 1) as it applied at the time. Consequently, the Financial Supervision Act was not applicable to this credit.” – according to the press release.
Klarna provided confidential financial data covering 2023–2025 to demonstrate that its business model is based on fees paid by merchants, not revenue generated from consumers who fail to pay. Kifid accepted the argument.
That means Klarna’s BNPL service in this case was not treated as a consumer loan under Dutch financial supervision rules, and Kifid ruled that it therefore had no jurisdiction over the complaint. The decision follows a similar ruling from a Rotterdam court in July.
Revenue model not based on non-payment
In this complaint case, Klarna has sufficiently demonstrated, using an audit report by an accountant and recent case law from Dutch courts, that its revenue model does not consist of income resulting from non-payment by consumers, as stated in the ruling.
„The final conclusion in this ruling is that the complaint is inadmissible.” – Kifid concluded.
Marcel van Oost commented: „A significant win for Klarna, and an important development for the broader BNPL industry as regulators continue to debate where payments end and credit begins.„
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