German consumers have traditionally trusted the pay-after-delivery model, checking an invoice before paying, and this habit has carried over into a strong online preference for BNPL. Klarna, backed by a Swedish banking license, offers instant transfer (Pay Now), pay-later invoicing, and installments in a single interface, and expanded its footprint in Germany by acquiring the bank-transfer payment provider Sofort in 2014.

It is especially effective for merchants selling fashion and footwear, where returns are common because customers decide after trying items on, or for furniture and appliance sellers with higher order values where installment demand exists. Simply displaying a pay-later option is reported to reduce cart abandonment.

When a consumer selects Klarna at checkout and chooses instant transfer, pay later, or installments, Klarna runs a real-time credit assessment, and once approved, Klarna settles the amount on the consumer's behalf. Hecto Financial then receives the merchant proceeds in euros (EUR) and passes them into the settlement process.

Pay-later and installment products tend to face relatively strict industry screening, so it is advisable to confirm both contract eligibility for Korea-based entities and the likelihood of approval for your product category during the initial consultation.

• Business registration country

  Confirm contract eligibility for Korea-based merchants

• Sales channels

  The integration method and priority differ depending on your online sales channel mix, such as your own storefront, open marketplaces, or mobile apps

• Product categories

  Advance confirmation is needed to check whether your category falls under Klarna's restricted merchant policies

• EU regulatory compliance

  Confirm compliance with EU payment regulations such as PSD2 and SEPA (see official sources below)

For the merchant, the payment amount is confirmed in euros (EUR) regardless of whether the consumer pays later or in installments; Hecto Financial then receives and converts this amount and settles it in USD, KRW, or JPY as specified in the contract.

EU distance selling rules grant consumers a 14-day right of withdrawal, so cancellations and returns on pay-later orders can be relatively frequent. It is advisable to review your invoice cancellation process for returns in advance.

• Deutsche Bundesbank, Federal Financial Supervisory Authority (BaFin)Official information on Germany's payment system operations and financial supervision. Where this page differs from actual regulations, the official source takes precedence.