Why are my Klarna transactions refused?

Klarna

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

Klarna takes full responsibility for risk and has full control in the process of accepting or refusing transactions. Based on several factors, such as the shopper's profile, amount, and marke

Adyen doesn’t have any visibility on those risk profiles.

Klarna payments

An authorization by Klarna entails credit risk acceptance for a customer but no debit of funds.

Once a capture is requested, Klarna will automatically send your customer payment instructions. By default, capture for Klarna is manual, unless you specify otherwise when configuring the payment method.

Since these payment instructions aren’t invoices, Klarna doesn’t include the VAT amount separately.

Due to GDPR Klarna can’t share customer data with Adyen or others. Therefore, if your customers need help with their Klarna payments they can reach out to Klarna’s Customer Support. For example, when they’re receiving notifications, invoices, or reminder fees.

If a customer wants to have their payment instructions resent, as a business you can do so from the Orders App on the Klarna Merchant Portal.

Common reasons Klarna payments get refused

• The shipping address is different from the billing address.
• The amount is too high. Klarna is taking a calculated risk and  their risk appetite decreases when the amount of the payment increases.
• The billing address or contact details aren’t correct.
• Klarna isn't accepted in that shopper country/region.

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