Post-payment (paying for merchandise after it has been received) has grown in popularity in the Netherlands over the past decade. What is it and how does it work? Read on to find out more…
Two companies dominate the post-payment financial sector in the Netherlands, AfterPay and Klarna (Achteraf Betalen). You may have seen one of their logos displayed on a website you’ve visited and wondered about it. We answer that question with a quick overview of the service they provide to shoppers in Holland.
In short, both companies offer a financial service. They allow consumers to delay payment for online orders until after the merchandise has been received, thus removing some of the innate hesitation a shopper can have when buying a product from a picture on a screen rather than in person.
The way it works is the customer registers with the post-payment company at the time the purchase is made, agreeing they will pay for the merchandise unless it is returned. The order is then finalized with the seller. Once the order has been shipped, the seller notifies the post-payment company which then invoices the customer. The customer has up to 2 weeks to pay the invoice (or return the merchandise).
Benefit for the Customer?
If the merchandise received is not what they had envisioned (i.e. quality, color, etc.) or items do not fit (for example, with clothing or shoes), they can return the item(s) to the seller without having to worry about how and when they will receive a refund.
If the merchandise received is acceptable and does fit, they simply pay the invoice they have received by bank transfer or iDEAL.
Cost to Customer?
The retailer will typically charge a small fee for the customer to use the post-payment option, typically between €.75-2.00 per order. This is to cover the fee charged to the retailer by the post-payment company.
The post-payment option is not the same as paying by charge card, where the balance can be paid off in installments. The invoice must be paid in full if the merchandise is being kept by the customer.
The post-payment option is not available to everyone as the post-payment company can refuse service to customers with a bad credit rating.
About the Companies
AfterPay was founded in 2010 and four years later was purchased by the German media company Bertelsmann. According to its website, AfterPay is the leader in post-payment services in the Benelux and claims more than 4 million Dutch consumers have used its service. Some of its well-known partner retail webshops include Blokker, Decathlon, Expert, Ikea, Intertoys and Welkoop.
Klarna is a Swedish company that has been offering post-payment (Achteraf betalen) financial services since 2005. According to its website, it is the market leader in post-payment services in the European Union and is active in 17 countries. Among its Dutch webshop retail partners are Gamma, Media Markt, Wehkamp and Zara.