Klarna seeks US bank charter as it expands beyond buy now, pay later

Klarna has applied for a US banking license, seeking permission to create Klarna Bank USA through filings with the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation, according to the company. The move would bring a major buy now, pay later provider closer to a regulated US banking model after Klarna said it has provided $91.3 billion in credit to American users since 2019.

The Swedish fintech said about 30 million Americans use its services each year. Klarna is best known for short-term instalment credit at the point of sale, a model that has grown alongside e-commerce and has drawn increasing attention from regulators as it has moved into mainstream consumer finance.

A US banking license would mark a further broadening of Klarna’s business beyond its BNPL origins. The company already runs a licensed bank in Europe, a status it has held since 2017, and said a US bank would allow it to bring existing banking operations in-house.

Klarna said the proposed entity would be insured by the FDIC and would operate with its own independent board, governance arrangements and internal controls. In practical terms, a bank charter would place the new institution inside a supervisory framework covering capital, risk management, deposit insurance and consumer protection, while allowing the company to conduct banking activities directly through the licensed entity.

The company said Klarna Bank USA would support payments, savings, credit and merchant services, and would strengthen reliability across those businesses. Klarna also said the structure would support sustainable growth.

The application follows a series of product moves in the US and elsewhere. Klarna has said its US debit card has received one million registrations. The company has also recently introduced a stablecoin and announced plans to enter peer-to-peer payments, according to Finextra.

Klarna has selected Gary Harding to lead the planned US bank. Harding previously served as chairman and chief executive of Milestone Bank and as president and chief executive of Prime Alliance Bank.

Sebastian Siemiatkowski, Klarna’s chief executive, said the company sees demand in the US for a more transparent approach to banking. He said Klarna’s own banking license would be “the natural next step” and would give customers tools to borrow responsibly and build financial confidence, while increasing competition, innovation and choice for consumers and merchants.

The filing does not amount to approval. Klarna’s plan depends on regulatory review by Utah banking authorities and the FDIC, which would assess the proposed bank before any license or deposit insurance coverage could take effect.

This story draws on original reporting from Finextra Research.