When you choose to finance an order through Klarna, it settles the entire balance with the merchant immediately after debiting the first payment from your credit card. It’s at this time that the order will be processed and dispatched, so technically Klarna ships after the first payment has been made for the order as your financing will be declined if your don’t have the funds available for the initial instalment.
There is an exception to the rule here, however. You don’t need to make an instalment if you’re choosing to defer the payment for 30 days. Instead, the order will be dispatched after it has been placed, without you having to make a payment on the account. Of course, if you opt to buy now and pay later, you’ll need to settle the balance in full at the end of the period or face hefty interest charges.
This rings true regardless of whether you’re checking out at a merchant that offers financing through Klarna or using the one-time card feature to pay for items through Klarna at retailers that don’t typically offer the service (it’s using that method that you can use Klarna on Amazon). Act fast enough and you can even have the item returned and the first payment refunded before the second one was due to come out.
It’s because of this model that many people have flocked to Klarna, as it lets them get their hands on products much faster than they would have otherwise would have been able to, putting an end to the age-old practice of putting aside an item in a brick-and-mortar store then taking it home once the final instalment has been made, and it works because the merchants receive the full sum from Klarna right away.
This takes the risk away from the retailer. They’ve been paid for the item, regardless of whether the customer makes the subsequent instalments or not. If a purchaser defaults on a payment, it’s then up to Klarna to take the steps needed to recover the funds. But, again, the merchant is in the clear here as they’ve already had the money in full, so they have no issue with sending it out as soon as the order comes through.