FinTech News
Swedish BNPL App Klarna Applies for U.S. Banking License
Another foreign FinTech is seeking the right to become a licensed bank in the United States.
About Klarna’s Banking License Application:
Today, Klarna announced that it has submitted applications with the Utah Department of Financial Institutions as well as the Federal Deposit Insurance Corporation (FDIC) to launch a national industrial bank. As the company notes, it’s held a banking license in Europe since 2017. The company says it intends to work closely with regulators throughout the process and hopes to “deliver a modern, transparent banking experience for Americans” as a licensed bank.
Should its application be approved, Klarna Bank USA would be chartered in Utah and would be a wholly owned subsidiary of Klarna Inc. Former Prime Alliance Bank President/CEO and Milestone Bank Chariman/CEO Gary Harding has been chosen to serve as President and CEO of Klarna Bank USA.
According to Klarna, American customers have accessed more than $91.3 billion in funds since 2019. The firm also says that these customers saved more than $5.1 billion in interest as a result (when compared to credit card interest). In the U.S., the platform currently has more than 30 million annual users. Worldwide, the app has more than 119 million active users and processes 3.4 million transactions per day,
Currently, Klarna loans are issued by WebBank.
What They’re Saying:
In a press release announcing the development, Klarna co-founder and CEO Sebastian Siemiatkowski stated, “Banking is built on trust. We’ve seen firsthand the appetite for a fairer, more transparent approach in the U.S., and our own banking license is the natural next step, giving customers tools to borrow responsibly and build financial confidence, while bringing greater competition, innovation, and choice to consumers and merchants alike.”
My Thoughts:
When I first saw this news pop up in my feed, I immediately wondered why a “buy now, pay later” platform really needed to become its own bank. But, I’d seemingly forgotten that Klarna has expanded well beyond it’s original pay-in-4 premise. Today, it offers a variety of financing options as well as a debit card, savings account, and credit card. With that in mind, it’s more understandable why they’d want to offer these services directly rather than working with a partner bank (and presumably sharing profits with them).
As for whether or not this application goes through, it’s hard to say at this point. Perhaps the outcome of fellow Europe-based FinTech Revolut’s application will give us a better idea of what to expect.
Of course, it could be years before that happens. So, while this is intriguing news now, it could be some time before we see anything come of it.
Author
Other Articles by Kyle Burbank
Credit Card News
Personal Finance News
Rove Adds Frontier Airlines as 19th Travel Transfer Partner
A growing rewards program has added yet another transfer partner — and is offering a limited-time bonus on top of that. About the Addition of Frontier to Rove: This week, Rove revealed that Frontier Airlines was joining its stable of rewards transfer partners. That means that, now, Rove users can transfer their Rove Miles to Frontier at a rate of 1:1 (1,000 Rove Miles converts to 1,000 Frontier Miles). Notably,...
FinTech News
