Deferred payments – what are they and how do they work?

13.01.2023 Angelika Siczek
woman doing online shopping

E-commerce, though it has been developing at a remarkable pace for more than two decades now, does not stop regularly introducing new solutions, conveniences that make online shopping easier, more attractive and more inviting. There have already been quite a few groundbreaking implementations, but it seems that the most significant ones are related to payments. Today, ordering a product or service online comes down to just a few clicks, which we complete in seconds. We also feel completely safe paying through online operators. Another convenience that is very favorable to e-consumers is deferred payment, which has already won a large number of supporters. How does it work, and is it safe? We check.

Deferred payments – how do they work?

Unexpected and unwanted situations can often generate unexpected expenses. Is the kettle or iron broken, or is it absolutely necessary to buy a new set of winter tires? The costs may not necessarily be large but we may feel that the household budget has been strained. E-commerce specialists, recognizing this problem, have made available the so-called deferred payment. This is a particularly valuable option if only current financial obligations do not allow us to spend a few hundred more zlotys on a necessary item. What’s more, it is a very good safeguard against buying something we are not 100% sure about. Without incurring costs, we can order the product, and if it does not meet our expectations send it back.

Thus, deferred payment guarantees us the possibility of making a purchase with a postponed payment date, for example, by 30 days. We can also spread this repayment over several smaller installments. Let’s note another advantage of this solution – it is completely free, as long as we decide to repay the order within 30 days. Spreading the payment into installments may already generate small additional fees. Thus, deferred payment appears to be a very interesting alternative to a short-term cash loan.

What are the most popular systems that allow deferred payment?

Deferred payments can still be treated as new to the e-commerce horizon. However, globally, this type of payment has already gained considerable popularity. As it turns out, in Austria and Germany up to 30% of online purchases are made using deferred payment. In Poland, the trend should grow, especially since well-known payment operators such as PayU, Przelewy24 and Dotpay have already made this option available. And there are also newer players emerging in the form of PayPo or the Klarna system, which are worth taking a closer look at.

PayPo and Klarna – what is it and how does it work ?

Both PayPo and Klarna deferred payments are systems that allow you to place an order to pay for it later. As long as the online store allows such payment, it is enough to select such an option during the shopping process. Both platforms operate on similar principles. They offer secure deferred payment. We have up to 30 days to pay for the purchase. Until then, it is the operator who settles the payment for us. Both Klarna and PayPo also allow us to spread the payment into convenient smaller installments, which makes this method of payment even more attractive.

However, if we choose to pay in installments, we have to expect that the total purchase amount will be increased by interest. However, Klarna has developed an advantage in this field, and this is because it does not charge interest as long as the installments are paid on time.

Let’s also keep in mind that we don’t have to wait the sample 30 days to settle the order. We can do it earlier, as long as the expected funds appear in the budget.

Deferred payments have already managed to implement very well-known brands such as ASOS, Tommee Tippee, RayBan, Giant, Muji and H&M. Klarna, by the way, presents the full list of stores on its website.

Are PayPo and Klarna deferred payments secure?

Looking at the most well-known systems we have basically nothing to fear. It’s no different with deferred payments at Klarna, which takes great care of the security of our data or finances. This is a brand that has been around for more than a dozen years, offering online payments all over the world. However, it can be assumed that it will not be widely used in Poland. Klarna is SOFORT Banking transactions, which may mean that it will be associated with international brands.

What about PayPo? The free nature of deferred payment services may make many people doubtful about them. However, let’s note that this kind of form of paying for orders has already passed its tests in international markets and is fully secure. PayPo also guarantees adequate security. Let us also remember that if we do not like the ordered goods and return them, we will not pay for them. It’s hard to find greater security for our finances.

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