Comment by tshaddox
1 day ago
Isn't the 0% APR financing essentially just a sales expense? Even if people generally don't immediately roll into another 2-year agreement, the main reason zero-interest financing works for the sellers is simply that it makes it easier for people to spend money on expensive high-margin stuff.
Multi-year zero-interest loans are also commonplace in high-price, high-margin specialty retail: think La-Z-Boy, Sleep Number, home improvement, hot tubs, home gym equipment, etc.
They also charge heavy interest and fees to people who miss payments, but in this case that will be captured by Klarna.
Klarna does not charge interest or fees to people who miss payments.
https://www.klarna.com/us/help/payments/what-happens-if-i-ca...
> Late fees: what to expect > Late fees may apply if your payment isn't collected after multiple attempts:
> Pay in 4: A late fee may be charged per missed payment.
> Pay in 30 Days: Be sure to pay on time to avoid late fees.
> Pay over time: Late fees and interest may apply as outlined in your credit agreement.
Unlike what a lot of people in this country think, Klarna is not free money.
Yes, and for most of those retailers I mentioned the financing is handled by e.g. Synchrony Bank.
Probably the better way to look at it is that the finance charges are built into the price.