Is it permissible to use Klarna pay to buy goods and pay in monthly instalments over 24 months. They off interest free repayments.
Based on the information provided on the website, Klarna has some interest free products as well as products based on interest. We have not come across any issue as of yet with the products that do not charge interest. The way they work seems very similar to debit cards where they charge the business merchant a transaction fee and then settle payment with the buyer according to pre-set terms and conditions. If this is the manner in which they operate then it would be permissible to avail of their interest free products. As for products based on interest, they would not be permissible.
Though a transaction maybe lawful in Islam, one should also look at the bigger picture and carefully analyse the potential impact ‘By Now Pay Later’ schemes can have on ones religious and psychological state. There are undoubtedly cases where such schemes have helped individuals purchase necessities which they may not have been able to otherwise, however, on the other hand these products do make it easier for people to over spend and end up in debt. They also build a mind set of instant gratification where people buy what they want immediately, despite not having the economical means to be able to fulfil the obligations associated with the purchase.
Ifta Research Fellow
Checked & Approved by:
Mufti Abdul Rahman Mangera
Mufti Zubair Patel