Klarna Wants to Turn BNPL Users Into Banking Customers

Klarna built its U.S. business by letting shoppers pay later. Now it wants to become the bank those shoppers use every day.

On July 6, major buy now, pay later (BNPL) provider Klarna announced it had submitted applications to the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation (FDIC) to establish Klarna Bank USA.

It won’t be Klarna’s first venture into banking. Klarna has been a licensed bank in Europe since 2017. In the United States, Klarna works with partner banks such as WebBank, which issues the Klarna Card for U.S. customers.

0 Million30 Million Number of Americans Klarna says uses its products each year

Klarna has more than 119 million global active users and handles more than 3.4 million transactions per day. Klarna says about 30 million Americans use its products each year, and the company says more than one million retailers use its services.

That large U.S. user base gives Klarna a built-in audience for banking products beyond BNPL.

If approved, Klarna Bank USA would be a wholly owned subsidiary of Klarna Inc. and this new bank would be chartered in Utah and insured by the FDIC.

If approved, the charter could allow Klarna to bring more U.S. banking operations in-house and reduce its reliance on partner banks for some products.

For consumers, Klarna promises transparent banking, free of hidden fees, combining digital tools with traditional banking offerings. Klarna customers who already trust the brand may be more willing to use the banking products Klarna has to offer.

A banking charter would move Klarna beyond BNPL and into more direct competition with banks and credit card issuers. As a bank, Klarna would be able to provide deposits, lending and other banking products to customers all the while continuing to build and deepen relationships with merchants.

So banks and card issuers, along with BNPL rivals such as Affirm, have their eyes on this potential bank charter.

Klarna built its brand in the U.S. by letting shoppers split purchases at checkout and pay later. If its U.S. bank charter is approved, Klarna could turn those shoppers into full-time banking customers. That is certainly the aim.

"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." — Sebastian Siemiatkowski, Klarna CEO

In February, Klarna reported that it had 4.2 million active card users for its Klarna Card so already Klarna is having success with a banking product.

In that same press release, Sebastian Siemiatkowski, Chief Executive Officer & Co-Founder of Klarna, said the company’s strategy was to acquire customers through payments and deepen customer relationships with banking products.

Klarna Savings launched in June through the Klarna app, with accounts provided and held by WebBank, member FDIC. Klarna says it is not currently an FDIC-insured bank, and deposit insurance covers the failure of WebBank, not Klarna.