This week, DoorDash announced a partnership with the Swedish global retail bank Klarna that will allow customers to split purchases for food into four equal interest-free payments or defer payment until later. Since DoorDash offers delivery on more than just food now, that means your $22 burger, $7 concealer, or $15 phone charger can all be financed in the coming months. Even the $96 annual DashPass, which offers users $0 delivery fees and reduced service fees for DoorDash members, can be paid in installments.

Klarna’s Chief Commercial Officer, David Sykes, framed the partnership as part of a broader mission:

Many consumers online are not convinced this is a win.

The Internet reacts

Reaction to the partnership announcement was met with jokes and criticism on social media. In a viral video with more than 2 million views on Instagram and over 1 million on TikTok, comedian Matt Buechele poked fun at the absurdity of financing fast food.

Commenters across social media pointed out that “DoorDash debt is crazy.” Delivery apps already tack on significant fees, and if you can’t afford to order, maybe it’s time to pick up your food yourself. Others called the move dystopian, arguing that buy now, pay later — or BNPL — preys on convenience culture and encourages irresponsible spending.

Klarna responded to the social media frenzy with a blog post titled Convenience Shouldn’t Cost: How Klarna Puts Consumers First, clarifying that its "Pay in 4" deferred payment option applies to purchases over $35. The company explained that, much like using a credit card to buy electronics or beauty items from a major retailer and paying off the bill later, this option allows customers to have items delivered through DoorDash and pay in a way that works for them. 

Interest-free doesn’t mean no fees

Klarna's presents its BNPL with friendly, appealing branding that emphasizes themes like “fairer, more sustainable payment options” and “healthier, interest-free BNPL options.” This marketing approach may cause some people to overlook the fact that BNPL services are still a form of credit.

Klarna’s “Pay in 4” option comes interest-free—unless you’re late. Then Klarna can charge you up to $7 in late fees, capped at 25% of the total purchase amount. If your order is split (say, part ships now, the rest later), you may unknowingly end up with multiple “Pay in 4” loans. If you choose a longer-term plan, Klarna offers financing from three to 36 months, with interest rates from 7.99% to a whopping 33.99% APR which varies per state.

I called Klarna’s customer service to experience it and better understand their model as a potential customer. A rep told me that in my state, the APR is 28.99%. This is a fixed interest rate for the life of the loan. She broke it down for me with an example of $100.

Over six months at a 28.99% interest rate, I would end up paying Klarna a total of $128.99, broken up into six payments. The first payment is due the day I make a purchase to ensure the order goes through and that my credit or debit card is active. She recommended I use a debit card to avoid the added complexity of using a credit card. If I can’t pay the second installment, I have a 10-day grace period, after which I will be charged a $7 late fee, which gets added to my next installment. She also mentioned that three late fees can be added during the six months. If I don’t pay within about two months at the end of the loan period, my balance will be sent to collections.

A Klarna spokesperson told Axios the company conducts thorough eligibility checks before approving a purchase and limits further access to its services if a customer misses a payment. This approach, the company says, helps prevent customer debt from piling up, with 99% of loans repaid and losses significantly lower than the credit card industry standard.

The company distances itself from credit cards, saying its model “provides consumers with a transparent and predictable repayment structure, making it easier to manage their finances without the burden of accumulating interest.”

Klarna’s critics aren’t convinced.

Axios has referred to BNPL as the "Gen Z credit card," while a separate CBS News investigation called it "old-fashioned loan sharking with a Silicon Valley smile." Critics say people are not sufficiently informed of the risks involved and are often influenced by marketing that encourages them to take on loans they otherwise wouldn’t.

How Klarna benefits businesses

Klarna describes its business as “consumer-centric.” It’s popular for allowing people to defer payments without interest, integrating seamlessly with online shopping platforms, and offering flexibility during periods of economic uncertainty. But its value proposition to merchants is clear: a 23% increase in average order value, a 20% boost in conversions and a 46% higher purchase frequency among BNPL users. Klarna takes on the fraud and credit risk, and the business gets paid upfront.

Klarna’s motto? “Shop. Checkout. Repeat.” Klarna’s incentives are structured to get customers to buy more, more often, more easily. This is not about financial empowerment — it’s about conversion. The retailer benefits because customers buy what they otherwise could not afford. Instant gratification combined with delayed payment options reduces cart abandonment and can persuade hesitant shoppers to buy now.

Interestingly, the Klarna–DoorDash partnership announcement comes as Klarna is heading toward an initial public offering on the New York Stock Exchange in pursuit of a $15 billion valuation. Axios reports that DoorDash is the market leader in restaurant delivery services, with 63% of the market, making its move into BNPL a big moment for Klarna ahead of that IPO.

A reporting blindspot

Providers of BNPL products have historically shied away from sharing data with the three major credit bureaus — Equifax, Experian and TransUnion — making it difficult for regulators to track key consumer statistics, such as how much people use BNPL, whether they are taking out multiple BNPL loans and what their total debt balances are, according to a January study from the Consumer Financial Protection Bureau (CFPB) that aimed to close that information gap.

The study found that 21% of consumers with a credit record used BNPL in 2022. 63% percent of BNPL borrowers had multiple active loans simultaneously, and 33% borrowed from multiple BNPL firms. Nearly two-thirds of BNPL loans went to borrowers with lower credit scores. 

This all suggests that many people are stacking loans — taking out multiple BNPL loans at the same time — which could lead to financial strain if they struggle to keep up with overlapping payment schedules. Consumers ages 18 to 24 are nearly twice as likely to use BNPL, and for those who do, it makes up 28% of their total financial debt in the months they borrow.

The CFPB noted that since BNPL is showing up more in people’s credit profiles, additional research is needed to understand how it affects their overall financial health.

Right now, Klarna doesn’t share its loan data with credit-reporting companies, according to Bloomberg. But this week, one of its competitors, Affirm, said it will start reporting data on its pay-over-time loans to Experian on April 1. Scott Brown, Experian’s group president of financial services for North America, said in a statement:

BNPL in 2025

PYMNTS predicted in January that 2025 will be a “pivotal year” for BNPL, as regulators seeking to tighten oversight clash with payment providers over how the industry should be regulated.

Last October, fintech industry group the Financial Technology Association (FTA) filed a lawsuit challenging the CFPB’s final interpretive rule on BNPL products, which classified BNPL lenders as credit card providers.

FTA President and CEO Penny Lee issued a statement on the lawsuit, saying the industry “welcomes regulation” as long as it fits the “unique nature” of pay-in-four BNPL products. She alleged that the CFPB rushed its decision, overstepped its legal authority, and could create confusion for consumers.

With the fate of the CFPB hanging in the balance under the Trump administration, what happens next remains uncertain.

Is that burrito worth four payments? 

In my opinion, no. I avoid unsecured debt at all costs. If you’re not familiar with the term, unsecured debt is money you borrow without collateral—like a house or car—as a backup. It’s based solely on a promise to repay, like a credit card or BNPL loan. BNPL might look different from a traditional credit card, but it comes with risks if you’re not careful or don’t have a clear plan to pay it off on time.

You might feel like you’re “getting ahead” by delaying payment, but what you’re doing is pushing the problem you have down the road, and it will catch up with you.

That said, a lot of us are struggling to stay financially afloat right now, and let’s be clear: this is not a moral issue. Many of us are just trying to figure out how to cover basic bills. I even know people with above-average financial resources who are feeling the crunch. We are juggling child and pet care, insurance payments, elder care, mortgages and other real-life obligations that do not pause when the economy gets tough. And sometimes, when you’re trying to keep it all together, avoiding unsecured debt just isn’t realistic. Emergencies happen, and we do what we have to do.

But we’re not talking about paying for a medical bill or a car repair when it comes to ordering DoorDash. The DoorDash-Klarna partnership says more about the state of our economy and cultural mindset than it does about tech innovation. We are normalizing debt for everyday conveniences and making it seem empowering to pay $13 for a burrito (or burrito bowl) in four installments, all while joking about it online. Even though, yes, that's actually below the $35 minimum!

For some people, Klarna may be a helpful tool for managing both everyday necessities and discretionary purchases. But for others, using it can lead to growing debt and financial difficulties.

Eat now, pay later seems less like convenience and more like a warning sign.

Struggling with money or debt? Here are some free resources worth exploring

The National Foundation for Credit Card Counseling (NFCC) provides nonprofit financial counseling. While most NFCC-member agencies offer free credit counseling and educational resources, some charge for specific services. Fees vary depending on the agency and state laws. You could qualify for a fee waiver for bankruptcy counseling or a debt management plan based on your income or military service.

Debtors Anonymous is a 12-step program for people feeling overwhelmed by debt or financial obligations. There's also a counterpart to it called Underearners Anonymous, for those who feel like they’re not earning enough to meet their needs and want to change that.

These are donation-based, peer-led groups designed to help individuals take practical steps toward improving their financial situation. People from all walks of life and varying income levels are invited to participate, as financial issues can affect anyone, regardless of their income level.

This article has been updated to include new information.