Klarna & FreshBooks add BNPL to small business invoices

Klarna has partnered with FreshBooks to add its payment options to FreshBooks invoicing and payment flows. The integration is available to FreshBooks users in the US and Canada.

The deal lets small businesses using FreshBooks offer Klarna within their existing payment process, with no additional setup. Supported by Stripe, it applies to service-based businesses and other small firms that send invoices through the platform.

Customers receiving invoices through FreshBooks can pay in full, split a bill into four interest-free instalments, or finance higher costs over time. The option is designed for transactions ranging from routine jobs to larger projects.

Examples include plumbers billing for standard call-outs, mechanics charging for mid-sized repairs, and contractors invoicing for renovation work. In each case, merchants can offer the payment methods directly through the existing FreshBooks flow.

Beyond retail

The move continues Klarna's push beyond its established retail and eCommerce markets. It has been building ties with business software and payments groups as it seeks to place its products in a wider range of commercial transactions, including services and subscriptions.

Klarna has also partnered with Fiserv and Housecall Pro to reach more businesses and service providers, and with Zoom to expand payment options for subscription services. The FreshBooks agreement adds another route into small-business billing, particularly among independent operators and small teams.

FreshBooks focuses on software for service-based solopreneurs and smaller businesses, with tools for invoicing, payments and other finance administration tasks. Adding Klarna gives those users another way to collect payment while keeping reconciliation within the same system.

Lisa Robinson, Head of Partner Success for the US East Coast and Canada at Klarna, said the target market is central to economic activity in both countries.

"Main Street small businesses and entrepreneurs are the backbone of the U.S. and Canadian economy, and getting paid reliably and on time is what keeps them running," said Lisa Robinson, Head of Partner Success, US East Coast and Canada at Klarna.

"By partnering with FreshBooks, business owners can now use Klarna to offer their customers more ways to pay - in full, in four interest-free instalments, or financed over time. Customers get payment flexibility, while FreshBooks users retain the confidence of predictable cash flow," Robinson said.

Payment choice

FreshBooks said the addition is designed to fit into the workflows merchants and their customers already use. It presented the change as part of a broader effort to keep payment processing and reconciliation inside its software.

"Enabling our merchant users to process and reconcile payments directly within their business software is a huge convenience not just for them, but for their clients and customers, who enjoy an exceptionally easy, fast payment method," said Jeffrey Imm, GM of Financial Services and Payroll at FreshBooks.

"Offering BNPL as a payment choice brings even more convenience to the process, and has been shown to increase small business speed of cash flow and revenues substantially, while removing their risk of not receiving payment for their products or services. FreshBooks is excited to now be making Klarna available as an option for our users eager to offer BNPL," Imm said.

The partnership also reflects continued interest among smaller firms in alternative payment methods that give customers more flexibility without changing their back-office systems. For service businesses, where invoice sizes can range from small maintenance charges to larger project bills, the ability to offer multiple payment options at the point of payment can affect how quickly money is collected.

Klarna says it has more than 120 million active users globally and handles 3.8 million transactions a day. The company is listed on the New York Stock Exchange under the ticker KLAR.