Over the weekend, I reported that GoDaddy would “soon” offer a financing option for aftermarket domain name purchases, per a comment from Paul Nicks. The company is now testing a buy now pay later (BNPL) option via Klarna on aftermarket domain names. This allows a buyer to purchase a domain name and pay for it over a period of time.
You can have a look at this screenshot from TowelSpa.com, which utilizes the GoDaddy BIN landing page, to see how the implementation appears:
Notably, with the BNPL option from Klarna, a seller will be paid in full at the time of the sale. This is different from other financing options where the seller is paid in installments based on when the buyer pays. The seller doesn’t have to worry about collecting payments over time or possibly having the domain name returned if the buyer defaults or opts out. This is an advantage of a BNPL option like Klarna.
People who may not be able to afford to purchase a high value domain name will be able to use Klarna to pay for a domain name acquisition over time. They can get their business started on a great domain name and pay for it as the business ramps up.
During the last couple of years, BNPL has become a popular payment option, particularly for luxury goods such as timepieces, workout equipment, furniture, and other expensive goods. Offering this type of payment option to domain name buyers should help make an acquisition more affordable at the time of purchase.
Although GoDaddy typically performs these types of tests on its own portfolio of domain names (NameFind) first, I understand the company is testing Klarna as a payment option on all domain names listed for sale on its network. There is no downside to doing this since a sale paid via Klarna is indistinguishable from a sale paid using another payment option.
I am not sure how long GoDaddy intends to test Klarna before rolling it as a permanent payment option. I presume the company will provide an update when it goes live, and hopefully they will share some metrics to give sellers an idea of the lift the BNPL option provides.
“Notably, with the BNPL option from Klarna, a seller will be paid in full at the time of the sale.”
yes, that’s actually why we decided to go this route initially rather than a lease-to-own approach. In the BNPL model the buyer gets the benefit of smaller payments over time and the seller gets full payment at time of sale just like a standard buy-now purchase.
Good idea, Paul.
Excellent idea, and very happy to see Godaddy actively improving the buying process. The ns5, ns6 landers have been money for me and I imagine this will improve on those results!
One question I have is what is the maximum price GoDaddy will offer Klarna as a payment option?
What the fees using that payment option?
25K right now
Good to know.
Good job on the part of GoDaddy.
What if the buyer defaults on the payment and GoDaddy have already paid to the seller?
I presume the same thing that happens if a buyer defaults on a mattress or preowned Rolex purchase. As far as I know, the retailer and seller have no responsibility. Here’s an article explaining how BNPL works: https://www.fool.com/the-ascent/credit-cards/how-does-buy-now-pay-later-work/
The seller keeps their money.
Just found out that Klarna Payments are currently only available to buyers who live in the US.
Also, Klarna financing option for aftermarket domain name purchases is now available on “some” Domains.
This info is about Godaddy only.