Settlement configuration
A Settlement configuration defines how Klarna aggregates Partner balance transactions and produces settlements for a Payment Acquiring Account, including the settlement schedule, the Settlement Account, and the bank accounts used for payouts.
A Settlement configuration defines how Klarna aggregates Partner balance transactions and produces settlements for a Payment Acquiring Account. It determines:
- When settlements are generated according to the Settlement schedule.
- Which Settlement Account aggregates payment transaction events and funds.
- Which Bank accounts are used when a settlement results in a payout.
Aligning the Settlement configuration with the Partner's banking and reporting setup makes settlements from Klarna easier to reconcile against the Partner's internal ledger and banking records.
Klarna creates and maintains the Settlement configuration for each Payment Acquiring Account on behalf of the Partner. Partners do not currently create or update these configurations through an API. Coordinate any structural changes with Klarna.
A settlement represents the net result of all Partner balance transactions, including:
- Captures
- Refunds
- Chargebacks
- Fees
A payout occurs when the resulting settlement balance is positive. Negative balances are carried forward and netted against future positive settlements.
Relationships and dependencies
A Settlement configuration always belongs to a Payment Acquiring Account.
Each Payment Acquiring Account has one Settlement Account, which acts as the running balance that receives all Partner balance transactions. Partner balance transactions are individual financial entries posted to the Settlement Account, representing events such as captures, refunds, chargebacks, fees, and other payment transaction events. They are summed into a settlement and reflected in the settlement report. The Settlement Account is aggregated according to the defined schedule to generate each settlement.
Payment transaction events such as captures, refunds, and chargebacks contribute entries to the Partner balance and ultimately affect the settlement outcome.
graph TD
P[Partner]
PAA[Payment Acquiring Account]
SC[Settlement Configuration]
SA[Settlement Account]
BA[Bank Account]
PTE[Payment Transaction Event]
P --> PAA
PAA -->|1..1| SC
SC -->|1..1| SA
SA -->|1..n| BA
PTE -->|posted as| SA
class SC primaryEntity
- Payment Acquiring Account: The account that receives settlement for all associated payment transaction events and funds.
- Settlement Account: A Klarna-managed balance associated with a Payment Acquiring Account. All Partner balance transactions (for example, captures, refunds, chargebacks, and fees) are posted to this balance. According to the settlement schedule, the Settlement Account is aggregated to produce a settlement, which may result in a payout when positive, or be carried forward and netted against future positive settlements when negative.
- Payment Transaction Events: Events such as captures, refunds, and chargebacks that produce Partner balance transactions posted to the Settlement Account.
- Bank accounts: One or more accounts that may receive payouts when a settlement balance is positive.
What a Settlement configuration contains
A Settlement configuration includes the following elements:
| Element | Description |
|---|---|
| Settlement schedule | Defines when settlement cycles occur and which Partner balance transactions are included in each cycle. |
| Settlement Account | The account used to aggregate all payment transaction events and Partner balance transactions. |
| Bank accounts for payouts | The bank accounts that may receive payout amounts when a settlement is positive. |
| Payout reference prefix | A prefix to the reference used for the payouts, helping identify and reconcile settlement entries. |
| Currency | The currency associated with the Settlement Account, where applicable. |
Settlement schedules produce settlements, not payouts. Payouts occur only when the settlement balance is positive; negative balances roll forward and are netted against future positive balances.
Frequent use cases
Settlement setup during onboarding
Klarna sets up the Payment Acquiring Account and creates the associated Settlement Account. Klarna then configures the settlement schedule, the payout bank accounts, and any reference prefixes. Partners do not perform these steps directly.
Updating settlement routing or structure
If the Partner changes its banking setup or reorganizes its legal structure, Klarna updates the Settlement configuration to reflect the new arrangement. Changes to bank accounts, schedules, or reference prefixes are performed by Klarna.
Handling multi-region settlement flows
When the Partner operates separate Payment Acquiring Accounts by region or market, Klarna creates multiple Settlement Accounts and Settlement configurations, enabling independent settlement and payout routing.
Configuration patterns
Single global Settlement configuration
A single setup covers all of the Partner's activity:
- One Settlement configuration covering all Payment Acquiring Accounts.
- One Settlement Account.
- One set of bank accounts.
- Simplified reporting and reconciliation.
Region-based Settlement configurations
Separate settlements per region or market for operational and reporting reasons:
- UK Payment Acquiring Accounts → Settlement Account A → UK bank account.
- EU Payment Acquiring Accounts → Settlement Account B → EU bank account.
- Separate configurations create clear reporting boundaries.
Best practices
- Align Settlement configurations with how the Partner's organization structures Payment Acquiring Accounts and bank accounts.
- Use a consistent settlement reference prefix to simplify reconciliation.
- Reuse configurations when settlement behavior is identical.
- Introduce additional configurations only when required for operational or reporting needs.
- Coordinate structural changes with Klarna, since Klarna performs all modifications to Settlement configurations.