Klarna is a payment service provider offering different payment methods, of which open invoice (Pay Later) is the best known payment method. It offers shoppers the option to pay for orders 14 days after delivery. At the moment of shipment, Klarna pays Adyen (upfront), thereby bearing the full risk. Klarna then needs to wait for the funds to be transferred by the shopper to them within those 14 days. Next to Pay Later, Klarna also offers "Pay over Time" and "Pay Now". 

Because Klarna takes full risk, they also have full control in the process of accepting or refusing transactions. Based on several factors, such as the shopper's profile, amount and market, Klarna's risk engine refuses the transaction whenever this engine believes the profile is too risky. 

Unfortunately Adyen does not have any visibility on those profiles. We therefore always advise our merchants to block the Klarna payment method whenever the same shopper gets refused on a regular basis. 

Some common reasons why Klarna payments get refused:

• The shipping address is different to the billing address
• The amount is too high. Klarna is taking a calculated risk and this will increase with the amount of the payment
• The billing address is inaccurate
• Klarna is not accepted in that shopper country
• You are sending in wrong contact details

For testing LIVE Klarna payments, it is important to know that you need to input real customer data because fake data won't work. Klarna checks all information that is sent to them, and if they receive a request that contains fake data, they will simply refuse it.

For more information, please visit Klarna.