Klarna seeks U.S. bank charter in push beyond buy now, pay later

Swedish fintech giant Klarna has made a significant move by applying for a banking license in the United States. The company, known for its popular buy now, pay later services, announced that it has filed applications with federal and state regulators to establish a U.S. bank subsidiary. If approved, Klarna Bank USA would be a Federal Deposit Insurance Corp.-backed institution based in Utah, with Gary Harding, a seasoned banking executive, set to lead the proposed bank.

Sebastian Siemiatkowski, the CEO and co-founder of Klarna, expressed his excitement about the potential for a fairer and more transparent approach to banking in the U.S. market. He highlighted the company’s commitment to providing customers with tools to borrow responsibly and build financial confidence, while also introducing greater competition, innovation, and choice to the industry.

The decision to pursue a banking license reflects a broader trend in the fintech industry, where companies are increasingly seeking to establish their own charters rather than relying on partnerships with traditional banks. By owning a bank, Klarna aims to bring its banking operations in-house and enhance reliability across payments, credit, and merchant services.

This strategic move aligns with Klarna’s broader vision of expanding beyond its buy now, pay later offerings. The company recently introduced high-yield savings accounts to U.S. customers, signaling its evolution into a comprehensive consumer bank. By having its own bank charter, Klarna can fund loans with customer deposits, offer checking accounts and credit cards directly, and reduce reliance on third-party banking partners.

Despite its recent public listing, Klarna’s stock price has faced challenges, trading at around half of its initial public offering price. However, the company’s bold step towards acquiring a banking license demonstrates its commitment to innovation and growth in the competitive fintech landscape.

In conclusion, Klarna’s application for a U.S. banking license marks an important milestone in its journey towards becoming a fully-fledged financial institution. With a focus on empowering customers and driving industry-wide transformation, Klarna is poised to reshape the future of banking in the United States.