What to know about Sofort payments

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  1. Introduction
  2. What is a Sofort payment?
  3. What are the advantages of a Sofort payment?
  4. How do Sofort payments work for customers?
  5. How does a Sofort payment work for businesses?
  6. What are the differences between a Sofort payment and an instant payment?
  7. How much does a Sofort payment cost the business?

A Sofort payment is a payment method that is often offered when checking out online. Read this article to learn about how Sofort payments work and the benefits they offer for both customers and businesses. We also explain the difference between a Sofort payment and an instant payment.

What's in this article?

  • What is a Sofort payment?
  • What are the advantages of a Sofort payment?
  • How does a Sofort payment work for customers?
  • How does a Sofort payment work for businesses?
  • What are the differences between a Sofort payment and an instant payment?
  • How much does a Sofort payment cost the business?

What is a Sofort payment?

A Sofort payment is a fast and easy way to pay online. Customers are transferred directly from an online shop's website to its bank's site. A Sofort payment is comparable to a typical bank transfer, except that the payment provider acts as an intermediary. Sofort payments are unique because the business receives confirmation of the transaction as soon as the transfer has been completed, allowing it to deliver goods immediately.

The name "Sofort payment" comes from "Sofort GmbH", the German business that originally developed this payment method. The name means "instant" in English, and was chosen to make it clear that customers make a transfer immediately when they complete their online purchase. Swedish payment provider Klarna acquired Sofort GmbH in 2014.

What are the advantages of a Sofort payment?

A Sofort payment offers several benefits businesses and customers. For businesses, it removes the risk of a chargeback because the payment is confirmed immediately. Another major benefit is that the delivery process can be expedited because there is no need to manually check whether a payment has been received. This leads to shorter wait times for orders. Because businesses receive confirmation of the transaction immediately, goods can be sent for delivery straight away. This expedites the entire process, improving the customer experience.

Sofort payments also use the highest security standards and encryption technologies to protect sensitive data, allowing providers to guarantee that transactions are processed securely.

How do Sofort payments work for customers?

If a customer chooses a Sofort payment as their payment method when ordering from an online shop, they are transferred directly to another page where they can select their bank and log in using their online banking details. Customers need to have an online banking account to be able to use this payment method. The recipient and payment amount fields will be auto-filled, but the customer needs to confirm the payment using a transaction number (TAN). Customers often need to verify the process using two-factor authentication. Customers are then redirected back to the online shop and the process is complete.

Another benefit of Sofort payments for customers is that they are offered by many online shops, allowing for a fast and easy payment process. And if the customer returns an item or has a complaint, they can usually receive a refund to their bank account within a short period of time.

How does a Sofort payment work for businesses?

Both small retailers and large businesses can integrate Sofort payments, which are user-friendly, secure and reliable. To make the most of the benefits offered by Sofort payments, businesses need to integrate Sofort payments into their checkout process, allowing customers to log in to their online banking account and authorise the payment.

Once the transaction process has been completed, the business will receive confirmation immediately, notifying them that the transaction has been successful. However, this does not mean that the recipient has received the money. The payment provider Klarna acts as an intermediary and now takes responsibility for the payment until the money has actually cleared. During the payment process, Klarna first confirms whether the customer's account has sufficient funds available and then processes the payment with the business later on. This means that businesses can send goods for delivery with the knowledge that they will receive payment.

What are the differences between a Sofort payment and an instant payment?

Unlike an instant payment, where money is transferred to the recipient's bank account in seconds, with no need to wait or process anything manually, a Sofort payment requires the customer to provide their bank account details in order for the money to be transferred. A Sofort payment is a standard bank transfer which uses a payment provider as an intermediary. Unlike with an instant payment, the money is not credited to the business's bank account directly. Instead, in its role as provider, Klarna sends an instant transaction confirmation to the business and then processes the payment with the business at a later date.

How much does a Sofort payment cost the business?

In addition to a one-off setup fee and a monthly basic fee, Klarna charges a basic fee of 0.9% + 0.25 EUR for each successful transaction.

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